Public Bill Committee

[Frank Cook in the Chair]

Schedule 1

The Legal Services Board

Amendment proposed [this day]: No. 30, in schedule 1, page 121, line 6, leave out ‘with the concurrence of the Lord Chief Justice’.—[Bridget Prentice.]

Question again proposed, That the amendment be made.

Frank Cook: I remind the Committee that with this we are taking Government amendments Nos. 31 to 39.

Jonathan Djanogly: The Government argued that, by allowing the Lord Chancellor to appoint the Legal Services Board alone, he would in some way be able to better protect British consumers. However, that is merely speculative. The Lord Chief Justice is no less able than the Lord Chancellor to give effect to the intended statutory regulatory objective to protect the interests of consumers. Indeed, give the standing of politicians in the public eye at the moment, it is arguable that the Lord Chief Justice will be seen as more important and a greater friend to the consumer than the Lord Chancellor. By the way, contrary to what the Minister said earlier, the Joint Committee’s Second Reading briefing, which called for the Legal Services Board to be appointed by an independent commission—as judicial appointments are made, for example—rather than by the Secretary of State, also specifically said that all appointments should be made at arm’s length from Government. The Lord Chief Justice has a great interest in safeguarding the independence of the profession, which exists to serve the justice system that he is in charge of.
We need to rethink the appointments provisions generally. There are key three issues. First, the legal services ombudsman and the Law Society Consumer Complaints Board have limited scope for action, compared with the Legal Services Board, because they do not deal with the mainstream regulation, only with complaints. Secondly, as the hon. Member for North Southwark and Bermondsey rightly said, the Lord Chancellor now has a different role from the one he used to have. He is not the head of the judiciary now and could be a much more political figure in the House of Commons. Thirdly, this is a modernising Bill, which we welcome. Just because Nolan worked 10 years ago in its current form, that is no reason why we should not rethink it now in today’s circumstances and in relation to the Bill.
 Transparency and impartiality are essential attributes of any public appointments system, especially if it is to retain the confidence and respect of the general public. The Legal Services Board does not pass this test if the Lord Chancellor alone is to have sole power to appoint and terminate it. If agreed to, the amendments could fatally undermine the LSB from its inception. That is the view of the legal profession, the Law Society, the Bar Council, other regulators, the Conservatives, the Liberal Democrats and Cross-Bench peers who amended the Bill in the House of Lords. This is also the view of certain foreign legal regulators. The Minister and her colleagues should now open their eyes to the evidence and ask leave to withdraw their amendments.

David Burrowes: I declare an interest as a practising solicitor and a member of the Law Society. The concern is, as my hon. Friend has said, not just about independence, but about the perception of independence. There is concern that we ensure that there is a balanced debate. It is all very well for the Minister to talk about the consumer time and again, but she will note, as I will mention shortly, that the regulatory objectives are not just about the consumer. That objective must be properly balanced with other objectives. It is important that we do not seek to make one compete against the other at this early stage, before the regulatory objectives have been properly implemented and worked through. Putting one regulatory objective above another is not a good example for the supervisory body or any other regulatory authority to follow, because we have not succeeded in any amendment with regard to the hierarchy of those objectives.
There has been a wealth of evidence on the issue. To return to the Joint Committee evidence that my hon. Friend the Member for Huntingdon prayed in aid and draw out some of its conclusions, a number of professional bodies, such as the Chartered Institute of Patent Attorneys, the Institute of Trade Mark Attorneys and others, were four square behind the need for proper independence, saying:
“the Chair should therefore be wholly independent of the Executive to avoid any perception of bias or influence and to ensure maximum confidence in the regulatory system from consumers and”
approved regulators. Although any debate should focus on the need to bolster independence, it should work in tandem on the importance of confidence for the consumers.
Then there were the consumers groups that gave evidence. I take issue with the hon. Member for Bassetlaw saying that the Joint Committee was a lawyers’ love-in, as such. It involved—and in a very short period—a wealth of evidence from a range of consumer bodies and individuals. It is to the Joint Committee’s credit that it did such hard work and managed to get a balanced flavour of the debate.
One of those loud voices was the National Consumer Council, which said in oral evidence that although it was
“fully in the consumer interest that the professions are independent of the state...So long as we have an open appointment process that ensures we have the right people for the job, that is what really matters here.”
That is what matters to consumers—getting the right people in the right job. In many ways, the Minister overstates consumers’ concerns about the current position in the Bill, whereby the appointment takes place with the concurrence of the Lord Chief Justice. I would suggest that consumers’ great concern is not so much about the formality of the concurrence of the Lord Chief Justice, as about the fact that the appointment, applied through the Nolan process, delivers a candidate who is there by merit and is the right person in the right job. That is what matters to consumers.

Adrian Bailey: I have heard the consumer perspective being prayed in aid of the Lord Chief Justice having the veto on the chair of the Legal Services Board, but in all my experience the public perception of the legal fraternity is that it is a closed shop. The breakdown in confidence is to do with the profession’s self-regulatory nature, as perceived by the public. Indeed, members of public have come to me asking for Government interference, in order that the legal fraternity does not regulate itself. That totally contradicts the argument that both the hon. Gentleman and the hon. Member for Huntingdon, the lead member of his party, have made. I do not believe that there is a great concern among the public about the interference of the Government. The concern is about the self-regulatory nature of the organisation.

David Burrowes: As I said, the evidence that I heard in the Joint Committee from the consumers’ voices was that the concern was about the right person getting the job. The concern was not about any move towards a concurrent process involving the Lord Chief Justice.
 Although consumers, as well as clients whom I represent and others, are concerned about regulation and about those lawyers who are bad and who need to be properly brought, the primary day-to-day concern when someone instructs a lawyer is that that lawyer should be independent from the state. That is of primary importance. If that confidence is knocked or broken, that will fundamentally affect not only individual consumers’ confidence but, more widely, confidence in the system and, even more widely, confidence in the rule of law.
I want to be as balanced as I can about the different interests and evidence. During an intervention on Second Reading, someone said, “Hey, you’ve got the legal services ombudsman, what’s wrong with that?” As the ombudsman herself said, “I am independent, impartial and very clear. I do not work for the Government, I report through the Secretary of State to Parliament. What’s wrong with the process of appointing the legal services ombudsman?”
The important context, which we are dealing with, is missing. We are dealing not just with any old regulation or appointment, but with a supervisory role that is unique to this country’s system, and with the unique regulation of lawyers. Some would say that they are unique because they need robust regulation; others in a balanced way would say that lawyers—love them or loathe them—have a unique nature and a unique role in society. I should like to draw those matters out.
 The Government’s rebuttal in evidence, in today’s sitting and in the Joint Committee was that it is the consumer interest that matters, and that the consumer interest is that the Lord Chief Justice should not have a concurrent role. My concern is that that rebuttal is not consistent with the regulatory objectives that the Government sign up to. The objectives represent a balanced approach in which consumer interest is accounted for in a non-hierarchical way, the public interest is protected and promoted, and the constitutional principle of the rule of law is supported.
I have not heard the Minister extol that principle or say that an appointment process in concurrence with the Lord Chief Justice would in any way undermine the constitutional principle of the rule of law. She would not, because she knows very well that the concurrence of the Lord Chief Justice would properly bolster and affirm those principles, which include
“improving access to justice;...promoting the interests of consumers;...encouraging an independent, strong, diverse and effective legal profession; increasing public understanding of the citizen’s legal rights and duties;...maintaining adherence to the professional principles.”
They are all balancing objectives, and any support of the Government amendment to remove the concurrence of the Lord Chief Justice must be properly justified. One cannot just say, generically, “It is not in the consumer interest”; one must also justify why one does not support the other regulatory objectives.
The Minister’s argument for abolishing the Lord Chief Justice’s involvement in any formal process is the pick-and-choose approach that we were concerned about in our opening remarks. Our concern is about the way in which we would deal with the regulatory objectives if the Bill did not ensure that one interest or objective was not put above another.
 The Minister’s other rebuttal to the concurrence of the Lord Chief Justice is that with the Commissioner for Public Appointments, there is an already established process for appointing in the manner that is being put forward. The argument is that it happens anyway, so why should lawyers be a special case? Medics are a special case, however, and the legal profession has a unique role and it should be dealt with in a unique way. Its regulation is not similar to any other regulation. The Government might say that the Financial Services Authority is unique, but their argument would fail to recognise the special position of legal services regulation. It should not have privileges as such, but there should be proper regard for its role in society.
It is important for good public administration that appointments to bodies such as the FSA are made on merit, but it is not a matter of constitutional significance. One would not find in any regulatory Bill about the FSA regulatory objectives that also involve supporting the constitutional principle of the rule of law. They would not be in there. That is why we need to deal with the supervisory regulation of lawyers in a unique way.
Let us examine the FSA further. There is no constitutional reason why the Government should not regulate financial services directly should they wish to do so. However, the position of legal services is different. It is a fundamental constitutional principle that the legal profession should be independent of Government. That can be properly secured only if the bodies that regulate it are themselves independent of Government.
 The Minister’s other rebuttal is, “Well, just another lawyer would be put in place by having the Lord Chief Justice there.” In many ways, that does not give proper credence to and respect for the Lord Chief Justice—

Bridget Prentice: I do not remember saying that.

David Burrowes: It has been said in debate. Although the Minister may not have said those words, it was put forward in the other place as a rebuttal to the Bill. One must take account of the fact that the independence of the profession is very much bound up in the independence of the judiciary, which is a cornerstone of our constitution and should be properly respected. It is not sufficient just to say that the Lord Chief Justice may well be contacted or consulted as part of the appointments process and that may happen in the formal manner. There needs to be a formality to this situation, but that would not be the case should the amendment be accepted.
It is also not adequate to pray in aid Sir David Clementi. His report did not specifically say that he wished to have the concurrence of the Lord Chief Justice. However, he was arguing in a context. He said:
“Given the need for independence, and the objective of the rule of law”.
Interestingly, despite not being a lawyer, he makes particular reference to the rule of the law. The Government have not mentioned the point much in supporting this amendment.
Sir David Clementi continued:
“it seems right that the judiciary should be involved in the appointment; but that it should be solely their appointment would imply that they had primary responsibility for the regulatory system and its performance.”
He was examining whether the judiciary should be solely responsible for the appointment, and decided that that should not be the case and that consultation with the Lord Chief Justice should take place.

Kevan Jones: We have not got to the bit in the report, but is that not contrary to what the hon. Member for Huntingdon was arguing this morning? I am talking about whether this is about consultation or direct involvement in these appointments. I can sit happily with Clementi’s idea that consultation should take place—the Minister allowed exactly that on Second Reading.

David Burrowes: One part of the wide-ranging debate is the fact that different views exist. We heard that the consumer bodies have different views about the particular details of the process, but Sir David Clementi was not against the concurrence of the Lord Chief Justice as a matter of principle. His primary concern was that this should not be the sole responsibility of the Lord Chief Justice or the like. He was also explicitly concerned that there needs to be an involvement of, and recognition of the responsibility and importance of, the Lord Chief Justice or the like to maintain the independence of the profession. That not only needs to be done; it must be seen to be done.
 The concern, heightened by all the Minister’s justification for the amendment, is that the independence of the profession must be guaranteed in the Bill. If one were to apply the process, the Nolan principles and the Commissioner for Public Appointments would be involved, there would be consultation with other groups—consumer groups and the like—and the Lord Chief Justice would be involved in a formal manner. The concerns of consumer groups would properly be directed.
It is important that the regulatory objectives, in all their ways, are properly balanced. This amendment would not ensure that. I ask the Minister to take proper account of Sir David Clementi’s remarks that the LSB should not only be independent, but be seen as such. Will the Minister give me a birthday present? It might not be my best or most personally cherished one, and it would not be for lawyer colleagues—

Kevan Jones: The hon. Gentleman is a lawyer.

David Burrowes: Indeed I am, and I have declared that interest. However, my present would not be only for lawyers; it would be important for the rule of law and the constitution of this country.

John Mann: I have listened with increasing incredulity to the vested interests. There is nothing wrong with anyone having a vested interest, but two aspects are unique to the legal profession. First, unlike any other professionals, lawyers can use their profession to defend themselves. The Army is probably the only comparable—

Simon Hughes: And politicians.

John Mann: Yes. One of the few things on which the hon. Gentleman and I would ever agree is that there should be maximum openness on all issues and in all ways when it comes to politicians. However, at least we can be voted in and out.
When I raise issues on behalf of my constituents, only one profession threatens me. The police do not, although if a constituent of mine has a complaint against them, they may not be happy. The medical profession does not issue threats, although a complaint may end up removing a senior consultant and the profession would not be happy about that. Insurance companies that have refused to pay but are forced to pay significant amounts for mistakes may not be happy, but they do not threaten.
No—the legal profession issues threats; lawyers are the ones who write to me and my constituents and threaten us. That is what is unique. Frankly, when I get yet another threat of a writ, it is water off a duck’s back. I used to frame them; there are so many now that they have to go in a big box file—soon they will have to go in a big garden shed because I get them so often. The lawyers have never managed to carry out their threats, because—

Tobias Ellwood: The hon. Gentleman should not upset them.

John Mann: Well, let me give the hon. Gentleman some facts. Let me tell him about the 33,619 people who pursued a case for miners’ compensation but died while their claim was ongoing. Under the law of averages, some would have, but that number says to me that there is a whole group of solicitors out there who are incompetent at doing their job on behalf of the people whom they purport to represent. Furthermore, in that case, they are over-generously paid for doing so. Those 33,619 died while their claims were ongoing. That is why there is a big issue.
The majority of lawyers are decent people doing a decent job. What is unique about the legal profession is not that it includes a minority of bad solicitors, although that is the case, or that there is a slightly larger minority of incompetent or semi-competent ones, although that is also true, but that if it is challenged, it can and does use the law to threaten. Thousands of my constituents get threatening letters, and that is just in my area. Why is that? It is because of the perception among lawyers that they have access to justice and others have not, and that they know the system and others do not. Others have to pay for someone to represent them, but lawyers can do it themselves because they have access to the courts. That is what is unique and why the system of regulation needs to be robust.
I hear talk about the separation of powers between the state and the judiciary. I would be happy to vote for that, and I have done. I would get rid of the House of Lords. If it cannot be got rid of, I would make it an entirely elected Chamber. We might then have some separation. What is particularly unique is the ability to use the House of Lords—there because of a professional position—to determine legislation. I accept that its rules of advocacy are significantly less weak than those for the House of Commons, but with regard to fundamental democracy there is too much access to not only the legal system, but the parliamentary system. That is why I have been referring so robustly to the voice of the consumer. There are 60 million people in this country, yet we categorise their view into that of the Consumers Association or the National Consumer Council. The people of Britain have a right to some basic regulation.
I would not criticise the Minister. I understand the pressures that she is up against when the legal profession is so adamant at protecting its vested interest at all stages from the judiciary to the lowest level. However, if I have a criticism of the Government, it is that they could be more robust and say, “No, that is not acceptable.” I cite Government amendment No. 33 and wish to highlight something to which no reference has yet been made. Perhaps someone would volunteer me to be a member of the Legal Services Board. I am willing to listen to all arguments. I am a strong supporter of decent lawyers, barristers and judges. Indeed, I do everything that I can to highlight the good and contrast them with the useless or the bad.
However, I shall not get through the necessary criteria because a member needs to have knowledge of
“the provision of legal services”.
I do not know whether I or the majority of my constituents can be so classified. A member must have knowledge of
“legal education and legal training...consumer affairs”.
I suppose that I could profess to having knowledge of consumer affairs. Members must know about
“civil or criminal proceedings and the working of the courts”.
By the way, I am referring to surveyed perception. I have not surveyed my constituents about their view of the judiciary, as I have a good idea of what they might come up with. However, in respect of legal services, they would perceive that lawyers are people to whom they have to go if they get into trouble and they want to be defended. If a family member is arrested, their perception of the legal service is that they must get a lawyer to defend that person. That view is quantified by the surveys that I have conducted.
I could carry on, but members of the Committee can read the Bill. They do not need me to take them through it clause by clause. In essence, the board as proposed by the Government and backed by Opposition parties will be packed to the rafters by members of the legal profession. It strikes me that a better membership would be if the board were made up of more than 50 per cent. of people who were not legal professionals. The argument about who appoints the members and so on might then be more tenable. If the board were made up entirely of people who were independent of the legal profession, such points might have more credibility.

Simon Hughes: I just have two quick things to say. First, I am sure that the hon. Gentleman accepts that paragraph 3 of the schedule states that the Lord Chancellor
“and Lord Chief Justice must have regard to the desirability of securing that the Board includes members who (between them) have experience in or knowledge of”
 such matters. It does not stipulate that every member must have such experience, but just that members of the board must have such talents between them. Secondly, I assume that the hon. Gentleman believes that it is still relevant, for example, to have somebody who knows about medicine to consider medical disciplinary matters, or someone who knows about policing to consider police complaints. All regulatory bodies need to have somebody who has practiced the service in question. Why? Otherwise, such bodies would be made up of an entirely ignorant group of people.

John Mann: Of course, that argument could be applied to the jury system, but I accept the hon. Gentleman’s point. I did not suggest that the board should be devoid of people who have a legal background. My question to the Minister and the main Opposition is: what percentage of the board, ideally, should be people who have had no prior professional involvement in the legal service? The answer to that question would help me to understand the Government amendments. The hon. Member for North Southwark and Bermondsey made the point that one or two people might be enough. What percentage of a board of, say, 10 should represent the great British public rather than the legal profession?
My other question is about whether regulators other than the legal services ombudsman, such as the certification officer for trade unions, should be subject to similar measures? Should the general secretary of the TUC be consulted on who is appointed to regulate trade unions? There should be consistency in the employment of the argument and it should apply to other forms of regulation. Such consistency would strengthen the point. Would Her Majesty’s Opposition agree that, on their logic, the certification officer for trade unions ought to be appointed by, or in conjunction with, the general secretary of the TUC?

John Hemming: The hon. Member for Bassetlaw asked some interesting questions. The matter comes down to the meaning of the word “independent”, and to what sort of independence we should aspire. I too have been threatened by lawyers this year—they have threatened to lock me up in Enfield because of what I was doing regarding various cases in the area. I have never made money from giving legal advice although, to declare an interest, I used to write computer programs for lawyers about 15 years ago, so I have made money out of the legal profession.
I recognise the problems of access to justice within the system that the hon. Member for Bassetlaw identified. The system can be over-complex, as can the statutes for which we are responsible. Because of that, understanding the system takes some doing. Unusually, I tend to go to courts in person as a litigant and, without question, there are problems.
The question of independence is crucial because, at the end of the day, we can have either the rule of law or the rule of person—there is not much else to govern systems. All systems strike a balance between the two and it is a question of where we should strike that balance. With the rule of person, as proposed by the Government, the Prime Minister appoints the Lord Chancellor, who appoints the Legal Services Board, which can in turn sack a firm of solicitors. That is the procedure and it is a change from the current system, which allows the legal services ombudsman to make a recommendation that can be ignored. It amounts to a clear rule of person over individual practitioners.
I accept that there are both good and bad people in the profession, and a lot of people in the middle territory. The legal profession is different from others because it can be a nuisance to Government on behalf of clients. According to the rule of law, the Government are required to follow the law. Judicial review procedures make the Government follow the rule of law. A competent solicitor or barrister may force the judicial review process. Some solicitors make particular efforts on particular cases, such as those involving Sally Clark and Angela Canning. Those people were defended against the false allegations that they had hurt their children by single firms of solicitors. Such cases are a nuisance to the system and to the Crown Prosecution Service. What the CPS thought was a case was proven not to be, and that was embarrassing to the Government. One of the difficulties is that if the Prime Minister is given the power to sack a firm of solicitors, we move away from the rule of law towards the rule of person. Government amendment No. 37 is crucial. It includes the ability to fire the chairman of the Legal Services Board. Government amendments Nos. 35 and 36 raise the issue of getting rid of Legal Services Board members.
Nolan principles can apply to appointments even if the appointment is agreed between two people because, at the end of the day, the Nolan interview process is still in use. Therefore, Nolan is a red herring in that sense. Government amendments Nos. 35, 36 and 37 explain how to get rid of people from the board. Why is the Government so frightened of including something in the Bill that is not within their gift?
I accept the perspective of the hon. Member for Bassetlaw. My view is that if the Legal Services Board comprises 10 people, three lawyers would be sufficient. I would personally support a statutory change—I do not know whether my hon. Friend the Member for North Southwark and Bermondsey would—that requires that the majority of the board have not worked in the legal profession.
 The medical profession has had difficulties with self-regulation. The General Medical Council turns a blind eye to certain things because they are embarrassing. The fact that the GMC is moving towards taking on a majority of non-medical people is important. When we talk about independence, there is often professional loyalty between people so they, too, tend to move embarrassing things out of the way.
I would strongly support having a majority of people on the Legal Services Board who have not at any stage been practising lawyers. That would give an independence from the profession, which is important. I do not think that the Minister was right to talk about having a tyranny for the consumer run by the Minister, which is what she said in the consideration of the draft Legal Services Bill. In that case, we would be going back to the rule of person and to the Government controlling the process.
We need to remember that clause 41 empowers the intervention directions to operate on individual practitioners. As I said, when one looks at the detail of the difficult cases, it is a small number of troublesome lawyers who are obtaining justice for their clients and often for free—not even on legal aid.
Allowing the Government amendments through is a clear movement away from the rule of law and towards the rule of person. Although I would strongly support suggestions that we should maintain the independence of the Legal Services Board from the legal profession by having a majority of non-lawyers on the board, it is fundamentally wrong to allow a basic principle of the British constitution to be undermined in that way.

Henry Bellingham: It is a pleasure to serve under your chairmanship, Mr. Cook. I would also like to put on record and declare my own interest as a barrister at law albeit non-practising, like the hon. Member for North Southwark and Bermondsey.
The point made by my hon. Friend the Member for Huntingdon was extremely well put. He said that the amendments that were passed in the House of Lords were passed by a substantial majority of 50. They had been very well thought out and extremely well argued. A huge amount of expertise was brought to bear. It was not as if it was a short debate at a particular point of the Bill in the House of Lords. This measure was discussed in Committee, on Report and then voted on. I have not counted up the number of peers and peeresses who spoke in the debate, but we are talking about a significant number. A lot of expertise was brought to bear. I urge the Government to look again at the argument that the Minister has advanced, because this is about checks and balances.
The power of patronage invested in the Government is significant. Let us consider the constitutional changes that are being made at the moment. We have a Lord Chancellor, who may soon be the Secretary of State for Justice, sitting in the House of Commons. That may be a good move, but his role will undergo further fundamental change as a consequence. In future, he or she may be an ambitious Cabinet Minister who wants to move on in the world. Having such a power of patronage in one person’s hands, without the checks and balances, would be a grave danger.
The key to this discussion is building in checks and balances. It is about being on the side of the consumer and trying to create confidence. The separation of powers is about being on the side of the consumer. The Minister said that the deletions and reversals that the Government are asking us to vote through this afternoon will make the Bill more consumer friendly. I would argue for the reverse because, surely, having checks and balances built in to try to restore confidence makes the Bill more consumer friendly and supports the wider public.
 As my hon. Friend the Member for Huntingdon pointed out, third parties have commented on this part of the Bill—not just the magic circle that he mentioned, including the leading law firms, but the eminent chairman of the Bar Council, for example. Indeed, my hon. Friend called in aid a number of overseas organisations, including the Deutscher Anwaltsverein, the German equivalent of our Law Society. Other interests have commented on this part of the Bill and stated clearly that having too much power in the hands of one person without checks and balances would be a grave mistake. It is about public perception.
Incidentally, I pay tribute to the Minister for the work she has done on the Bill from the word go. She has put a huge amount of effort, time and work into it, has worked hard to bring the different organisations and vested interests together and has got them to speak to each other, co-operate fully and reach a broad consensus. I applaud her for that, but I also urge her to listen carefully to the debate in the other place, which was long and highly involved and had a huge amount of technical input.
 On the points made by the hon. Member for Bassetlaw, who always speaks with a great deal of passion, I have been following from a distance the saga of the miners’ compensation claims and the scandal involved; those law firms have completely abused their position and taken their clients for a ride in the most horrific circumstances. The work that he has done to expose that is honourable and he deserves credit for it. I can see where he is coming from in terms of hon. Members’ interests, but as you rightly said, Mr. Cook, when we declare our interests we do so as honourable Members and those are on the record. If one took to its logical conclusion his idea that a barrister or solicitor should not speak or vote on matters to do with legal services, the same could apply to members of trade unions, who would not be able to speak on employment matters, and to journalists—hon. Members of all parties make money as journalists—who would not be able to speak on freedom of information.

John Mann: Would the hon. Gentleman care to read the introductory speech by the chairman of the Standards and Privileges Committee on 14 May 2002, which specifies exactly what the situation is with hon. Members of this House?

Henry Bellingham: I am grateful to the hon. Gentleman. He has obviously been following this issue carefully. He would not have made the comments that he made at the start unless they were backed up by fact and experience. However, I should like to put on the record my own view, which is that the House is the richer and Committees are the richer and more varied because people can bring their expertise to bear. I think that most of us take that view.
My hon. Friend the Member for Enfield, Southgate sat on the Joint Committee and his comments on Clementi were helpful and valuable. He was involved with the whole process running up to the Bill and with all the reports that went into it. He made the point time and again that this is about confidence. It is about trying to ensure the maximum confidence in the consumer, and there is a risk that the consumer will not have confidence in the new system. After all, we are talking about a framework that will serve not only one generation, we hope, but many. This is a once-in-100-years opportunity to reform completely the way in which the whole legal system is regulated and its framework. Obviously, the pinnacle is the Legal Services Board.
The point about dismissals is relevant. We have talked a lot about appointments and the need for concurrence, but as the hon. Member for Birmingham, Yardley pointed out, we are considering dismissals, too. Many of us can think of examples of where Ministers have dismissed people. I will not go into all the examples, but there have been famous cases of heads of quangos and different organisations being sacked by senior Cabinet Ministers. It is important to have checks and balances in place, because we are talking about trying to ensure the progress of the Bill, which has not divided the parties—we did not vote against it on Third Reading—and carries a huge amount of goodwill. I urge the Minister to take on board some of the points that were made in the House of Lords.
 Obviously, there are points, such as those to do with the delegation of complaints procedure, that will be far more controversial than this one. We are considering something very modest compared with the amendments in the House of Lords, and that fits in well with the Government’s pro-consumer agenda, so they should listen and should take on board what has been said this afternoon. I hope that the Minister will give my hon. Friend the Member for Enfield, Southgate a birthday present and withdraw her amendments.

Simon Hughes: Once upon a time there was a Lord Chancellor who was one of the most powerful people in the country. We have had some famous Lord Chancellors—people like Thomas More. Many people have heard of him even though they may not remember that he was a Lord Chancellor, and he came to a sorry end not far from here, as I remember. The Lord Chancellor had three jobs: he was Speaker of the House of Lords; he was a member of the Government once Governments were formed in the way that we know, having previously been the right-hand adviser to the monarch; and he was the senior judge.
The Lord Chancellor appeared in the House of Lords in his full attire, he wore a wig and he was a sort of Lord high everything else, but, to their credit, when the Labour Government came to office in 1997 they realised that that was constitutional nonsense. They realised that it was important to separate the functions of Parliament, Government and judiciary. At least, that was what they said that they realised. They introduced legislation in the House of Lords, and it was controversial: to change the role of the Lord Chancellor. The Liberal Democrats supported it in both Houses. There were great debates about what the name should be, and whether the title of Lord Chancellor should stay.
The outcome, as we all know, was that we still have a Lord Chancellor. However, although the role has a link with its historic antiquity, it is the official name—the constitutional name—for the Secretary of State for Justice, a Government Minister appointed by the Prime Minister of the day as a supporter of the Government, sitting in the Cabinet and looking after a Department with increased status and power, which is important. That is the Department in which the Minister here serves as one of the Lord Chancellor’s junior Ministers. 
We have given another person the job of the Speaker of the House of Lords, and that House now elects its Speaker. The Lords Speaker in office is the first person to hold that post. It was made clear in the legislation a couple of years ago that the senior judge would no longer be the Lord Chancellor but would be the Lord Chief Justice. That was part of the important constitutional division of powers referred to my hon. Friend the Member for Birmingham, Yardley that tried to deal with one historic anomaly.
This week has seen elections in France for the AssemblÃ(c)e Nationale. France has a clear separation between the powers of the Government and those of the Parliament. If an MP is appointed Prime Minister, he or she stops being an MP. I think that that is a bad idea, but it is what happens. The President is elected separately and Cabinet members have to give up being members of the AssemblÃ(c)e Nationale for as long as they are Cabinet members. We do not have that, but we have a fusion instead. We have government in Parliament, but it is important that we have a separate and independent judiciary. I put my first proposition to the Minister in a question. I think that she is seeking in her amendment to take away one of the safeguards in the Lords amendment: to provide that in the appointment process for the authority that will regulate the legal profession the appointees are absolutely and clearly unconnected with Government.
I have no doubt that when the Justice Minister of the day appoints people to the Legal Services Board the Ministry will take advice, place adverts and receive applications, and that people will be suggested and will apply, and will be appointed from that list. I have no doubt that the proper checks and balances, and the Nolan principles will apply, but we have had 10 years of Labour Government and the great British public have not decided that there is less nepotism or less placing of politicians’ friends. The public are suspicious. The Prime Minister came to office with great intentions of being whiter than white, but is leaving office, sadly for him—I do not rejoice in this because we all suffer—with the reputation of having often put his own people in jobs and used his own people to do his dirty work. Even the House of Lords, which had an independent commission, is not yet perceived as being entirely independent. There is a real crisis of confidence, and we must ensure that the judiciary is not only seen to be independent, but is respected for its independence.
 I remember intervening in a debate when some of the other proposals were going through Parliament to ask whether Ministry of Justice Ministers would make a promise—a self-denying ordinance—that from the moment they took over in the new Ministry at the beginning of May none of them, including the Under-Secretary of State for Justice, the hon. and learned Member for Redcar (Vera Baird), would ever again criticise judges. It is completely unacceptable that independent judges are slagged off by Ministers. They may be slagged off by The Sun and other papers, but to be slagged off by Ministers is completely unacceptable.
The profession is still too male, too old and too white. Judicial diversity is fundamental, and we must do more to achieve that. Only one Lord of Appeal in Ordinary is a woman, and there has been little change. None the less, judges generally have a good reputation, despite some of the attacks that they have suffered from the press, which should be free to attack them because that is what our free press is for.
I hope that the Minister realises that the Government amendment risks making it look as if the legal profession—it does not have the best reputation in the world, for reasons that we have often discussed—will have its regulators appointed by the Minister in charge of the legal profession, who is a politician.
My next point is that it is now entirely possible and, if the rumours are believed, very likely that the incoming Prime Minister will appoint the new Secretary of State for Justice from the House of Commons. I would welcome that, and have argued for that for a long time. The Secretary of State for Justice should be accountable to the elected Members of Parliament, not unelected people, but we must wait and see what happens in the next few weeks. If that happens, it will look even more as if the appointment is political. It is currently made by the Secretary of State for Justice, which is a political appointment, and who is still called the Lord Chancellor and sits in the House of Lords wearing a wig and breeches, although less often than he used to. The reality is that he is not perceived as being quite as party political as Ministers in the House of Commons. When we have a Secretary of State for Justice in the Commons they will be perceived as being party political.
What are the options? I reflected earlier on Committees that go on for a long time, and there is a cricket analogy and a tennis one. In cricket there are long periods with not much happening, but now and again an important innings occurs. This amendment is one of seven that the Government are proposing to reverse what has happened in the Lords. The tennis analogy is better as there are long rallies and lots of sets, like in the French final the other day, but occasionally there is a crucial game. This is a crucial game in the midst of the Committee’s proceedings because—

Tobias Ellwood: They are all crucial.

Simon Hughes: A keen Conservative behind me says that they are all crucial, but I am not sure about that. Many amendments, whether or not they are passed, do not make a fundamental difference.

Tobias Ellwood: What about the tennis?

Simon Hughes: Oh yes, the tennis is very important; I accept that. This amendment makes a lot of difference and relates to a small point. The options are for an appointment to be made by the Minister after consultation with the Lord Chief Justice and other people, or for a joint appointment to be made by the Minister in concurrence with the Lord Chief Justice. My hon. Friend the Member for Birmingham, Yardley and my hon. Friends downstairs stand by the decision made by the Lords that it should be a joint appointment. The compromise that might be discussed at the end of six rounds of going up and down the corridor between the two Houses is a consultation that guarantees a consultation; but, we are not there yet.
 A good reason for a joint appointment is that it would be a political appointment with Nolan rules of somebody entirely independent of politics. To answer the point made by the hon. Member for North Durham, it would be someone who is not accountable or under political pressure, and therefore would not get tainted by the fact that politicians have appointed them. Yes, for the foreseeable future, such a person is likely to be a lawyer. In fact, by definition the Lord Chief Justice will probably always be a lawyer. Some countries appoint people who are academic lawyers as opposed to practising lawyers and some appoint judges who are not lawyers and who have come up through the lay magistracy. The person appointed is likely to be a lawyer, but they would not be a politician and the present Lord Chief Justice and his successors are likely to have more credibility with the public than politicians.

Kevan Jones: Well, I shall be listening carefully in months and years to come when the more vocal Liberal Democrats react to newspaper articles and condemn judges. I am sorry, but I do not accept the hon. Gentleman’s view of a saintly figure that comes down from on high and has wisdom that we mere mortals do not. In reality, that is not the perception that most of the public have. Will the hon. Gentleman answer a question that is taxing me? If the decision is taken concurrently what happens if the two individuals—the Lord Chief Justice and the Lord Chancellor—do not agree? Who has the most weight in terms of deciding who should be appointed?

Simon Hughes: Let me deal with both points. First, I have never argued that judges are saintly; in fact I am probably accused of arguing the opposite. Judges are entitled to be and are criticised by people who participate in the court process and by the press, but now mercifully not by Government. The constitution requires that we have Government, Parliament and the judiciary. Once the judiciary has been appointed, it must be perceived to be above politics and be respected by Government—just as judges must respect the Government. I am clear that members of any Government—Scottish Government, Welsh Executive Government or the Northern Ireland Assembly—should never publicly criticise the judiciary. If people think that judges have been too lenient, there is a process for referring cases for reconsideration that can go higher. If people think that judges have been too severe, there can be appeals and the process can go higher. If people think that judges are incompetent, there are processes for removing them and for dealing with judges at all levels. Disciplinary procedures are better than they have ever been. Let me be clear, I am not saying that judges cannot be criticised—they are criticised—but that they should not be criticised by Government and that it does nobody any good, neither the Government nor the judiciary, if they are.
In answer to the second question, there is no greater weight given. If it is a joint decision, it is a joint decision. It takes two to tango and both have to agree; it is very simple. Many appointments in life require more than one or more than one representative in an organisation to agree—for example, appointments to local government or to boards that have to be made jointly by the local authority and the health authority. All sorts of bodies are jointly appointed and the Lords proposal states that both individuals need to agree. If the Lord Chief Justice proposes somebody and the Secretary of State for Justice says, “No,” that is the end of it. If the Secretary of State for Justice proposed somebody and the Lord Chief Justice said, “No,” that would be the end of it too. The good thing about that is that the person to emerge would be someone who by definition would command the confidence of both parts of the process—the political process and the independent judiciary—so that there would be a double level of confidence. That would be much better and safer, and the person appointed would have much more authority as a result.

Kevan Jones: That is an interesting reply. To follow the logic of the Liberal Democrat and Conservative Members this afternoon, the Lord Chief Justice is being put forward as some type of super-human independent individual. Are we therefore saying that the Lord Chief Justice’s views have no more weight than the Lord Chancellor’s views as a “mere politician”?

Simon Hughes: I cannot believe that the hon. Gentleman does not understand. The Lord Chancellor is the senior Government member in the Ministry of Justice and is the responsible Cabinet member. He or she will have the future responsibility for what we are discussing. Let us not deceive ourselves that he or she will not rely on civil service people for help, or that there is not administrative back-up, or that there are no support systems. At the end of the day, there is the senior person in the Ministry of Justice on the one side—the senior politician responsible for justice in England and Wales—and on the other side is the senior person responsible for the courts in England and Wales. It is simple; they have parallel roles.
Let us not deceive ourselves either that the Lord Chief Justice does not also have administrative back-up and civil servants, because he does. He would take advice and he would have administrative processes. We would therefore have two people, each with the benefit of advice, coming together to discuss things, and one might seek to persuade the other, or vice versa. When they agreed, the decision would proceed. The safeguards for the public would therefore be far better than if one person made the decision and took the responsibility.

John Mann: I follow the hon. Gentleman’s logic, but does it not also follow that a legal professional would automatically fill the position, as I fear? The proposal would have to be combined with the proposal that divides him from the Conservative party, whereby the chair must be a lay chair, so that the role is not automatically occupied by a legal professional. Does not his logic require both proposals to be adopted together, or neither?

Simon Hughes: I do not think that that necessarily follows. However, I accept the other part of the argument; I accept that it is a good idea that the chair of the Legal Services Board should be a lay person. I also share the view of my hon. Friend the Member for Birmingham, Yardley that the majority of board members should be lay people—that is exactly right. I have always taken a similar view in relation to the medical profession: the General Medical Council should have a majority of non-medics to stand in judgment on the medical profession—not exclusively non-medics, but a majority. Likewise, I have always been of the view that the Independent Police Complaints Commission should consist of a majority of non-police officers—although, again, there should be some police officers in the commission. I hope that I have been consistent in such views throughout my political career.
The answer to the hon. Gentleman’s question is that one does not have to implement both proposals, but it would be better if we did. He might say that, if the other two safeguards of a lay chair and a lay majority were built in, he would be less troubled by the joint appointment. I hope that that is the logic of his position.
My answer to the point made by the hon. Member for North Durham is absolutely no. The Lord Chief Justice would be just as competent to appoint lay people as lawyers; he would not be lobbying for lawyers. However, he or she would bring some knowledge about some of the lawyers who might be mentioned, because he or she would have seen them practise and know whether they were good or no good, competent or incompetent, and whether they had the confidence of the public. That knowledge could be brought to the table, and the Lord Chief Justice would be able to draw on the pool of all the experience of all the judges in England and Wales, whom he is there to represent—he and his future successor. His input would be of benefit; it would be a joint lock.
My final point is that a new structure is being created. The Minister knows that in general terms the structures that the Government are proposing have been welcomed by my party. However, we must begin with maximum public confidence, and I think that that will be governed by whether we have a lay chair, which would help with that confidence, as would having a lay majority. However, I am also clear that not keeping the appointments solely in the hands of a party politician—this year Labour, next year Conservative and in two years possibly Liberal Democrat, or whatever the sequence is—

Bridget Prentice: Now we are in fantasy land.

Simon Hughes: Well, after the next election, when we are all wondering who will form the Government, we will have a little cup of tea—or a couple of glasses of something else—to discuss whether or not that is fantasy. Wales and Scotland showed that things might not be that easy after the next election, and that is even without proportional representation.

Henry Bellingham: I just wanted to check one point. It has been stated that, in the unlikely event of a Lib-Lab coalition, the hon. Gentleman would get the post of Lord Chancellor.

Simon Hughes: The hon. Gentleman is having fantasy fictions all his own. As far as I am concerned, the coalitions that might occur have not been discussed and are not resolved. We will remain completely neutral about that until the great British public have decided whom they will elect into office. Then we will form a view, in the light of the facts of the case.
I am going to appeal to the Minister. I know that she starts from a position of resistance, but I ask her to reflect across Government. Not all posts are single ministerial appointments, even post-Nolan. There are still lots of joint appointments, in central Government, regional government and local government. The proposal would bring benefits. It would add credibility and strength, and depoliticise appointments. I hope that she will realise on reflection that if she does not concede now—although I do not expect her to concede today—we may, I fear, come back to the issue several times to come. In the end, there might have to be a Government concession. It might therefore be easier for us all if the concession came earlier, because we would have to spend less time on the Bill between now and October.

Bridget Prentice: Where do I begin? As I expected, this has been a passionate debate and has, unsurprisingly, divided the Committee almost on party political lines.
I want to deal with a couple of the individual issues raised first. I reassure my hon. Friend the Member for Bassetlaw that the legal services board will have a lay majority, as set out in paragraph 2(1) of schedule 1. However, the experience that he referred to under paragraph 3 refers to the board as a whole, so it will not be packed with lawyers.
The hon. Member for Birmingham, Yardley was concerned about the direction power being used against individuals. Clause 41 allows the LSB to direct the approved regulator, but after only ensuring that none of the powers under clauses 31 to 40 have been used to correct the failure. That power cannot be used directly, over individual lawyers. I hope that that gives the hon. Gentleman some reassurance.

John Hemming: The Bill implies that any power can be directed, so will the Minister explain where it says that that power cannot be used on individuals? I accept that clause 30 cannot be used on individual disciplinary cases, but clause 41 does not say that.

Bridget Prentice: Clause 41(1) says:
“The Board may give an approved regulator an intervention direction in relation to any of the approved regulator’s regulatory functions if the Board is satisfied”
by the conditions set out in paragraphs (a) and (b). The power therefore cannot be used, except in those circumstances. I do not want to go into double negatives, but that is where we are.
The hon. Gentleman was also concerned about the Lord Chancellor firing people. Again, he or she could not remove an ordinary member of the board, unless satisfied that one of the criteria in paragraph 7(3) of schedule 1 applied. Those criteria are clear, and are that the member
“has failed without reasonable excuse to discharge the functions of the office for a continuous period of at least 6 months...has been convicted of an offence...is an undischarged bankrupt, or...is otherwise unfit to hold the office or unable to discharge its functions.”
Before the Lord Chancellor can remove an ordinary member other than the chairman, he or she must also consult the chairman of the board. That is a fairly transparent procedure for removing an ordinary member other than the chairman.

John Hemming: On paragraph (7)(3)(d), will the Minister explain how she defines “otherwise unfit”?

Bridget Prentice: The term “otherwise unfit” would include medical reasons why a person may not be able to continue to do the job. There might be other reasons why they cannot do the job, but I would not want to define them in absolute terms. In general terms, we are talking about someone who clearly is not able to fulfil the functions that we would expect a member of the board to carry out. Such an approach is taken in legislation generally to cover such instances.
 John Hemming rose—

Bridget Prentice: I shall give way once more to the hon. Gentleman but I then want to move on, because we have had a long debate.

John Hemming: Whose opinion would be used to judge whether someone was “otherwise unfit”?

Bridget Prentice: One of the most obvious examples would be the chairman of the board. The chairman might tell the Lord Chancellor, “I feel that one of my members is not able to continue to carry out the board’s functions, and I want you to consider their removal.”
I move on to the main thrust of the debate about concurrence. My hon. Friend the Member for Bassetlaw got to the nub of the question: who decides what will happen if the Lord Chancellor and the Lord Chief Justice disagree about the appointment? If it is not the Lord Chancellor who decides, we would be handing over all the accountability to the Lord Chief Justice. I have not heard a single argument from the Opposition that could justify our doing so.
Let us examine some of the issues that have been raised—for example, the magic circle’s letter to the Economic Secretary, which said:
“Overseas legal professions and commercial consumers of legal services have expressed concern”.
The only example given was that of German lawyers. I believe that the hon. Member for Huntingdon said that he had received an e-mail from the Bar Council saying that I had been wrong about the BRAK. The BRAK is a representative body of the German federal Bar, although it may deal with both regulation and representation, as the Law Society and the Bar Council did recently until they split those things.

Jonathan Djanogly: As I recall it, the email also stated the concerns of France and Portugal. More importantly, will the Minister say what discussions she has had with her foreign counterparts on the international aspect that clearly exists?

Bridget Prentice: My right hon. and noble Friend, Baroness Ashton, who took this Bill through the House of Lords in an excellent fashion—how well she conducted the debates should be put on the record—has had regular meetings with our colleagues in Europe, because that is also part of her remit. One of the things that is interesting to note about the German Bar is that it is coming under increasing pressure from its own monopolies commission to get it to allow increased competition.
I believe that I said something on Second Reading about using the BRAK as the example of foreign legal firms being concerned about this measure. The BRAK might want to protect its own vested interests, and it is not our job to protect the vested interests of legal firms abroad.
To follow up the point, I turn to the comments made to the Joint Committee. To be fair, the Law Society has fairly regularly said that it is concerned about the international effect. However, Sir David Clementi himself told the Joint Committee—

Jonathan Djanogly: Will the Minister discount the opinion of the chairman of the Bar Council and of the five largest firms in this country, as she just has, without considering the problems that they have raised and deciding what she will do about them—or at least giving some idea of where the Government are coming from on the issue? Will she just say that it is Baroness Ashton’s responsibility?

Bridget Prentice: I did not say that it was Baroness Ashton’s responsibility. The hon. Gentleman asked whether we had had discussions with our foreign counterparts and the answer is yes. Baroness Ashton has had such discussions, and others with the European Commissioner, about the issues. There is a great deal of interest in the development of the Bill among quite a number of people, because some are thinking about whether to follow suit. Once again, Britain is leading the way in Europe, and I am pleased about that.
According to the report, Sir David Clementi himself said that
“none of the senior partners of the major international law firms, whom he consulted in the course of his review, had ‘expressed concern’ that reform would ‘somehow prejudice their ability to win business overseas’”.
Those are Sir David Clementi’s own words in quotes in the Joint Committee report.

Jonathan Djanogly: I read out a letter, which was copied to the Minister among others only last week. It set out the express concerns that the Minister has just denied. Is she saying that that letter does not exist?

Bridget Prentice: I am well aware that the letter exists; I am trying to tell the hon. Gentleman that when Sir David Clementi specifically asked the major international law firms about the issue, they expressed no concerns about their ability to win overseas business. Sir David also said that Secretaries of State have
“quite large oversight powers at present”
and that the proposed system
“would be a good deal more independent of oversight by Secretaries of State than currently.”
I shall come back to that point in a moment.
Sir David thought that it might be appropriate for the Lord Chancellor to consult the Master of the Rolls. I shall come back to the words “consult” and “concurrence”; if necessary, we will get dictionary definitions so that everybody understands the difference. The Lord Chief Justice and the Master of the Rolls said that
“provided that the LSB was ‘truly independent’, they did not consider that the international reputation of the legal professions would be affected.”
So we can put that particular myth to bed.
The hon. Gentleman was also concerned about the fact that the Secretary of State, the Lord Chancellor, would have that oversight of the legal profession. Obviously, he has forgotten that under the Courts and Legal Services Act 1990 the Secretary of State approves the key rules of the legal professions and can alter those rules by order. Under this Bill, all that will transfer to the legal services board. That will be a much more independent, open and transparent system.
I shall go through some of the other bodies to which ministerial appointment applies, but before that I want to talk a little about the office of the Commissioner for Public Appointments. By being blinkered or blind, the Opposition have simply ignored the role of the Office of the Commissioner for Public Appointments—established under a Tory Government after the Nolan committee’s recommendations.
The commissioner is appointed by the Queen, and he is independent of the Government and the civil service. He regulates, monitors and reports on all ministerial appointments, and selection processes are monitored by independent scrutiny, annual audit and the commissioner’s annual report. If there was concurrence with the Lord Chief Justice, there would be no formal reason why the Office of the Commissioner for Public Appointments should apply, and the appointment might not automatically come under the commissioner’s oversight. Surely that would be a far less open and transparent system than that which we suggest.

David Burrowes: If those were the Minister’s genuine concerns, would not the appropriate response have been for her to table amendments to establish in the Bill that appointments process? If the concerns are that the Commissioner for Public Appointments process would not properly apply and there would not be any proper accountability, would not it be an appropriate response to table an amendment establishing in the Bill the appointments process according to the Nolan principles or the relevant applicable rules at the time? That issue was raised in the other place, and it led to the Minister undertaking that the measure might be subject to the affirmative procedure.

Bridget Prentice: I could have done that, but it would have meant that I accepted the idea that there should be concurrence with the Lord Chief Justice. I do not fundamentally accept that case.

Jonathan Djanogly: Assuming that the Minister does not like the idea of concurrence, which she has made quite plain, it would be incorrect to say that we ignored the Nolan principles, because I spoke about them at some length. The point that my hon. Friend the Member for Enfield, Southgate makes is important. How will the appointments process work on the basis of what the Government propose? If concurrence is removed, what will the Government put in to replace it? One cannot just say “Nolan”. How will the Government adapt Nolan? Will they put out a paper about it? How will they take it forward?

Bridget Prentice: The appointment will be made in the way that all public appointments are made: they must follow the Nolan principles as set out under the Office of the Commissioner for Public Appointments.
For the record, on the number of appointments that are made to the board in that way, people are appointed to the Financial Services Authority by the Treasury, which can remove the chairman and the members of the governing body. The Secretary of State for Trade and Industry appoints and can remove the chairman and non-executive members of Ofcom; the Home Secretary appoints the immigration services commissioner after consulting the Lord Chancellor, and he can dismiss the commissioner on specified grounds; the Home Secretary also appoints commissioners to the Commission for Racial Equality; the Secretary of State for Communities and Local Government appoints the members and chairman of the Audit Commission; and the Secretary of State for Culture, Media and Sport appoints the chairman and commissioners of the Gambling Commission.
Why should appointments to the legal services board be any different from proper public appointments that are made under the scrutiny of the Commissioner for Public Appointments, with the Minister accountable to Parliament? I find it incredible that we have spent so long debating the matter when it is such obvious and common practice. We should have slightly more faith in our system of public appointments.

Simon Hughes: The reason why the appointment should be different is that the board will regulate an entirely different part of public life: the system that holds the scales, not a bit of a DCMS quango. The Minister will not be able to give me an answer to the following question now, but it is cheaper than tabling a written question. Will she let us have a list of all the joint appointments? She has given us some of the single appointments. Can she tell us why the answer to the question that has been bouncing around is that the person appointed jointly cannot go through the same process of being drawn from the Commissioner for Public Appointments’ pool as easily as anybody else, which guarantees that there will not be a single party political appointment? That has all the benefits and none of the disbenefits?

Bridget Prentice: I will do my best to find a list of all the joint appointments and all those made in consultation with other people. On the position of lawyers, however, the legal services complaints commissioner, who is appointed fully by the Secretary of State under the Courts and Legal Services Act 1990, can fine regulators when their complaints system has been failing.
Good practice has been carried on throughout. It is astonishing for Committee members to be trying to make this a party political issue. As I have said on Second Reading and in conversations with Committee members, the idea that the Lord Chancellor would make an appointment without consulting the appropriate people, among whom I would include the eminence that is the Lord Chief Justice, is beyond me.
Let me end by reading from a letter sent in response to the letter from the magic circle. It states:
“Claims by the five ‘magic circle’ leading solicitors’ firms that ministerial appointment of the new legal services regulator would endanger lawyers’ independence amounts to a clever sleight of hand...Ensuring the independence of the legal professions from government is important for lawyers’ clients too. But the original proposals safeguard this principle, since the process will be run by the independent Office of the Commissioner for Public Appointments—the standard convention for appointments to public bodies.
In fact, what matters most to consumers is the regulator's independence. The lord chief justice is a qualified lawyer and head of the judiciary in England and Wales. Giving him a veto over who should regulate the legal professions will undermine public confidence that the legal profession will be properly policed.”
That comes from the chief executive of the National Consumer Council. He expresses clearly the points that I made in my opening remarks.
The Bill provides for an independent board. I believe absolutely that the Lord Chancellor, whether as a Minister in the House of Commons or the House of Lords—he or she could be in either House—will make that appointment in the way that all public appointments are made under the Office of the Commissioner for Public Appointments and the rules and codes of practice therein. I see no reason why we need to have a veto from one member—even the most senior member—of the judiciary, when that consultation will make it transparent to both lawyers and consumers that the appointment is made properly.

Jonathan Djanogly: The arguments have been made and we are not happy with the Government’s position. I therefore ask that this matter is put to the vote. I seek your guidance, Mr. Cook, because we are unhappy with all the amendments other than amendment No. 37.

Question put, That the amendment be made:—

The Committee divided: Ayes 9, Noes 7.

Question accordingly agreed to.

Amendment proposed: No. 31, in schedule 1, page 121, line 10, leave out
‘with the concurrence of the Lord Chief Justice’.—[Bridget Prentice.]

The Committee divided: Ayes 9, Noes 7.

Question accordingly agreed to.

Amendment proposed: No. 32, in schedule 1, page 121, line 16, leave out ‘and Lord Chief Justice’.—[Bridget Prentice.]

The Committee divided: Ayes 9, Noes 7.

Question accordingly agreed to.

Simon Hughes: On a point of order, Mr. Cook. For the convenience of the Committee, I do not know whether it is acceptable to take all the amendments together, with the exception of the amendment that the hon. Member for Huntingdon tabled, but those on the Liberal Democrat Benches would be happy to do that.

Frank Cook: Procedurally, that is not possible if Divisions are requested. In any case, we have now reached amendment No. 264.

Kevan Jones: I beg to move amendment No. 264, in schedule 1, page 121, line 19, leave out ‘first’.

Frank Cook: With this it will be convenient to discuss amendment
No. 263, in clause 30, page 15, line 8, at end insert—
‘( ) that the majority of the ordinary members of a committee that an approved regulator authorises to exercise its regulatory functions are lay persons.’.

Kevan Jones: When I arrived this morning and saw the amendment paper, I was a little disturbed when I saw that the hon. Member for North Southwark and Bermondsey had added his name to it.
We have discussed several issues today, one of which was about the perception that the new regulatory body should not only be independent, but seen to be independent. The hon. Member for North Southwark and Bermondsey—

Frank Cook: Order. I ask the hon. Gentleman to speak up a little for two reasons. First, I am partially deaf and, secondly, there is a lot of chuntering on the Opposition Benches, so I wish to play one down and the other up.

Kevan Jones: I have been accused of a few things, but never of being quiet. I cannot excuse chuntering on the Opposition Benches.
The hon. Member for North Southwark and Bermondsey said earlier that we need to maximise public confidence in the Bill. Having lay people in the senior position of the chair and elsewhere on the board is a way of demonstrating to the public that we intend the bodies to be independent.
It is strange that the Bill stipulates that the
“first chairman must be a lay person”.
Why only the first? The legal services ombudsman is appointed by the Lord Chancellor in accordance with section 21 of the Courts and Legal Services Act 1990. The 1990 Act stipulates that the ombudsman is not a qualified lawyer and is independent of the legal profession. It is important that the individual who chairs the board is a lay person. That would give the confidence to which the hon. Gentleman has referred.
 I believe that the legal profession needs regulating not with a light touch, but with a heavy hand, because of the appalling way in which it has dealt with many of my poor and vulnerable constituents who applied for compensation through the mineworkers’ compensation scheme. It is clear that the Law Society has fundamentally failed those individuals and that there is a culture of denial, whereby it is believed that it can put its own house in order. My hon. Friend the Member for West Bromwich, West referred on Second Reading to a closed shop. The Law Society is the best example of a closed shop still in existence. When trade union closed shops were regulated by the last Conservative Government, the trade union of the legal profession was not regulated.
As my hon. Friend the Member for Bassetlaw has mentioned, no one would suggest that the certification officer who regulates trade unions should be a trade union official. People would quite rightly complain about such a situation.

David Burrowes: The hon. Gentleman mentioned closed shops. Would he suggest that the provisions in the Bill should also apply to Government lawyers?

Kevan Jones: I am sceptical about lawyers. My experience is that irrespective of the form that they take, they are good at protecting their own interests. It was interesting to see the gutting of the Bill in the Lords by the vested interests, which we have seen in operation today. No fewer than four out of the five Members present on the Opposition Benches are lawyers or barristers. There would quite rightly be a hoo-hah if a committee set up to consider trade union legislation was made up entirely of trade union officials or members.
 The important thing is get public confidence back. Ensuring that lay people have key roles would do that. I do not accept the arrant nonsense that the only people who are fit to sit on the kinds of bodies that we are discussing are people who understand procedure and the law in detail. People who do not have a legal background are clearly capable of filling such roles. The incumbent of the office of the legal services ombudsman, for example, is not legally qualified, yet she has done an excellent job of championing the rights of the consumer and of people who need protection. Amending the Bill would go a long way to protecting the vulnerable from the section of the legal profession that feels that it is above the law and that uses the law to advance not only its own case, but that of the whole group.
I do not accept the idea that was put forward on Second Reading and again today that a legal qualification bestows some kind of sainthood on a person and makes them the font of all knowledge and propriety. Clearly, some of the lawyers that my hon. Friend the Member for Bassetlaw and I have been  dealing with will not go to heaven. In fact, they are destined for eternal damnation, if there is any justice in this world.
If we are going to strengthen the Bill and, as the Minister has said on more than one occasion, put the consumer at its heart, it is important that the first chair of the board is a lay person and that lay people are in the majority on the committees and can argue the case for the consumer against the vested interest that we have seen not only in the other place but in this Committee today.

Simon Hughes: The hon. Gentleman mentions that my name appears on his amendment. I am now going to say something in support of the amendment. May I say to the hon. Gentleman that he should be much more worried about the people who oppose him rather than the people who support him? Sometimes coalitions of the just and the unjust, the righteous and non-righteous can get the deed done

Kevan Jones: But you are a Liberal.

Simon Hughes: That is true, but we have got to try to win the argument. We hope that we can sway the Government. I hope that the Government will be bold. I can see why they are where they are at the moment. They want to give the right impression and create a good start. After that, they think that they can settle down and leave the options open. There is a perfectly reasonable argument for that. There are good lawyers who could become members of the board and even the chair in the future.
May I say in passing that there are some fantastic lawyers, as the Minister and the Government know? I have been working with lots of people who are unhappy with the Government’s legal aid proposals. Many of them are lifelong committed lawyers in the public service working in the most difficult parts of Britain with the most difficult clients. There are also good lawyers in other sectors, such as people who deal with the entertainment and record industry, commercial transactions and the most complicated global commercial deals. There is no question that there are some fantastic lawyers.
The question is, what is the reality and what is the perception? We need to be bold about this. If we establish a principle that says, “start with a lay chair and continue with a lay chair”, we will put down a marker. Mercifully, the majority of adults in Britain are not lawyers. When I travel around the country and ask people what they want to do, I get the sense that more and more are giving one of two answers—and I say this as somebody who is a lawyer—namely accountancy or law. They are both honourable professions, but I sense that the world is suffering rather than benefiting from having too many lawyers and accountants. We probably could do with more roofers, tilers, joiners and people who do the more functional things.
Therefore, there is a majority of non-lawyers. The Bill is about regulating the profession. It is better that it is led by someone who comes from outside and sees it as others see it. There will be no shortage of people to give legal advice—staff, board members and many other people. With the best will in the world, I am sure that the great legal professions will occasionally drop a line to the Legal Services Board saying how they feel.
I hope that the Minister will be bold, take the amendment and then we can go home with one decision that makes it obvious to the world outside that these processes are wonderfully all worth while.

Jonathan Djanogly: I was slightly open minded about the amendment. However, I have to say that both hon. Members have failed to convince me. How far should the prohibition extend? The hon. Member for North Southwark and Bermondsey asked whether those who are qualified as lawyers but who have worked in business and have not practised as a lawyer for a number of years should be able to apply. As I read it, such a person would not come within the definition of a lay person under paragraph 2(4), and so they would presumably be discriminated against.
There is a layer of prejudice that would be unjust and nonsensical. As I said earlier, the Prime Minister is a lawyer and so is the Leader of the House. Lawyers run large private sector corporations and undertake a variety of public appointments. The head of the judiciary, the Lord Chief Justice, is a lawyer, and that was put into legislation recently. The remarks made by the hon. Member for Bassetlaw suggest that he believes that lawyers should not even be in this Committee. There is an element of nonsense. Why do we need to be quite so aggressive to lawyers? Has the hon. Member for North Durham—or, indeed, the Minister—taken advice on the human rights implications of the amendment? I would pleased to hear that.
I am not quite so open-minded on amendment No. 264. The suggested amendment seeks to ensure that the majority of ordinary members of a committee that an approved regulator authorises to exercise its regulatory functions are lay persons. Under the proposals, the Legal Services Board is, of course, to have a majority of lay members. It is important to remember that the role of the Legal Services Board is to monitor the regulators to whom it has delegated power. The proposal would therefore go against the Bill’s intention that the Legal Services Board should be a light-touch supervisor of the regulators, who can come out of the professions. In effect, the amendment would rip the heart out of the Clementi proposals.

David Burrowes: It is not only the Clementi proposals that cause some concern. I see some rationale or logic to the amendment, and perhaps it would have some merit if it were part of a package involving the concurrence of the Lord Chief Justice together with the chairmanship. That might persuade me. Without that package, the scepticism is raised by the fact that what the public surely want and what is in the public interest is that the best person for the job should be appointed. The amendment could, in many ways, get in the way of the process of following the Nolan principles in an open and transparent way. To deal with the matter in such a manner, merely because of the concerns about perception, is a step too far.

Jonathan Djanogly: My hon. Friend makes a common-sense remark, and offers an intriguing possibility for a Bill later. In the meantime, I should mention that we would not support amendment No. 264.

John Mann: I have certainly no objection to having the odd lawyer on this Committee. The Nolan principles are clear as outlined in the House in May 2002 and I am sure that all hon. Members will be reading them tonight. The issue is about vested interests and advocating on behalf of those interests, not about whether people should be able to participate. The real issue is about the balance.
What would happen if the initial lay chair were unfortunately to drop dead during that person’s first year in office, perhaps due to the pressures of the job? Would that mean that the replacement would automatically be a lay chair during that initial period? The reason that I think that an independent chair is important has nothing to do with solicitors. The Law Society has shown robustness in the past 12 months in looking after its profession and recognising that the names of all solicitors were being sullied by the actions of a minority. Indeed, in my area—the hon. Member for North Southwark and Bermondsey will be surprised to know this—there has been a reduction in the number of practising solicitors. Those who have sought to battle publicly have gone out of business. That may or may not be because I called on the general public to boycott their services, but a major building—the largest, I believe, in my constituency—is now vacant and up for commercial letting to another profession, which might indicate some correlation. That does not necessarily benefit my constituents, because it presumes that the other people to whom they can go are competent.
 What I want to say to the Minister, however, is that more than anything I do not want in post someone with wide knowledge, who is a retired ex-judge, who is well known to one of the appointees—or both, depending on how the Bill is enacted—and who will look after the vested interests of the profession that has served him well for 50 years. The general public do not need that, and I am more concerned about that than about whether the person in the post is a professional who is deemed to be professional without a vested interest.
 There should be a safeguard, and in that regard I was interested in the comments of the hon. Member for North Southwark and Bermondsey. I disagree with him, but the Liberal Democrat position is at least consistent; if we are to have a twin-track appointment, it logically has to be the appointment of a lay person. That means that the Minister’s position is consistent too, but if she has any further deliberations with the other House it is critical that that consistency should remain.
 The option always to have a lay person in charge would be a good safeguard; it would not just give a veneer of propriety but would send a message to the outside world that the legal profession has the confidence to deal with anyone in the profession who is behaving badly. That confidence is what needs to be reasserted; if the majority of good professionals have the confidence to deal with the minority of either bad or incompetent ones, that will boost the profession overall.

John Hemming: Does the hon. Gentleman agree that there is actually a very high probability that the Lord Chancellor and Secretary of State for Justice—or whatever title is then in use—will be a qualified lawyer in any event?

John Mann: Who knows what will happen in future weeks?
I come to my concluding remarks. The legal profession allowed industrial deafness to be dealt with without challenge by telephone; tens and tens of thousands of industrial deafness claims were dealt with by telephone. A lay person would regard that with the same incredulity as I regard it.
 It seems to me that the most relevant and powerful argument that my constituents and I can put forward, in light of that, is that having someone who is removed from the profession is more likely to result in consideration of the bigger picture. Such a person would be more likely to speak out whenever something was clearly nonsense, or whenever gobbledegook was presented as an excuse for their behaviour by a firm of solicitors. They would be more likely to say, “We are not having that; we are going to have some common sense for consumers.” That is the best argument for someone from outside the legal profession to oversee the board.

Bridget Prentice: Obviously, given the consumer focus of the legislation, I understand entirely why my hon. Friend is attracted to ensuring greater lay representation in the new framework. Unfortunately, I shall, of course, have to resist his argument. We all agree that the first chair should be lay, for the reasons that we have given. If the first chair is a lay person and demonstrably independent from the legal profession, that will send a message. It will give the direction that the board will go in, determine the culture of the new organisation and win the support of consumers. Indeed, the Joint Committee supported that position.
However, at a reasonable point in the future—once that has happened and those foundations are laid—it may be that the best person for the job is someone who has been a lawyer in the past, as the hon. Member for Enfield, Southgate said. We were charged at the beginning of this debate not to condemn all lawyers or to say that the profession was dreadful. I do not condemn lawyers, because there are some very good lawyers. Therefore, someone who has worked in the legal profession in the past might, at some future date, be a suitable person to chair the board.

Kevan Jones: I understand my hon. Friend the Minister’s point about the first person setting up the foundations of the organisation, but will she respond to the point that my hon. Friend the Member for Bassetlaw made? What happens if the first chair resigns on the second day or drops dead two weeks into the appointment? Would that not mean that a lawyer could be put straight in there, so that the confidence to which the Minister refers will not be there?

Bridget Prentice: I am reminded of the what if question that the hon. Member for Huntingdon asked in a previous debate. He asked a series of what ifs about the role of the Lord Chancellor in the appointment of the chair. I am also reminded of my teaching days. If children wanted to divert me from the objective of the lesson, they would ask a series of what ifs. By the time a teacher went past the first three, they were in the realms of fantasy and the little men from Mars were about to descend on to the planet. I do not suggest that my hon.  Friend has reached that stage yet, thankfully, but asking what would happen if a series of strange things happened does not necessarily move us forward.
 However, I will check what would happen if something dreadful took place within a week of the chair being appointed. Would that mean that we were into second-level appointments, as it were? In such a situation, I like to think that sense would prevail and that, given that we would still be talking about the board and the organisation as a whole starting out, another lay person would be the right person to appoint, in order to ensure that that culture and those foundations were set in a way that would give the perception of consumer confidence needed. However, I shall make absolutely sure that that is likely to be the case.

John Mann: May I phrase my question differently? Will the Minister give a guarantee that the Legal Services Board will have a lay chair for the first five years of its operation?

Bridget Prentice: Yes, I give my hon. Friend that guarantee. There we are—I have done it.

John Hemming: How can the Minister give that guarantee if we are going to appoint people according to the Nolan principles?

Bridget Prentice: Because the first chair of the board is to be a lay chair.

John Hemming: That is the first chair; we said for the first five years.

Bridget Prentice: But the term of office is five years.

John Hemming: What if they drop dead afterwards?

Bridget Prentice: My hon. Friend the Member for North Durham just asked what would happen if something dreadful took place. The appointment is for five years, and that first appointment of five years will be of a lay person. That is the guarantee that I give to my hon. Friend and to the rest of the Committee.

Simon Hughes: We are grateful for that. The first chair will not be able to wangle a legal chair by resigning, so that will be an incentive for them to see it through. The Minister did the right thing.
I think that I am right, but will the Minister clarify whether the category defined in the Bill as “lay persons” would not preclude somebody who was an academic lawyer only and who had never qualified as a solicitor, barrister or advocate? If someone were just a law lecturer at Nottingham university, for example, could they still be appointed? I just want to be clear for the record.

Bridget Prentice: The definition is in paragraph 2(4)(a) to (f) of schedule 1; if a person did not have one of the roles listed there, they would qualify as a lay chair.
Let me say briefly why we want to stop at that point and allow someone who may have been a practising solicitor or barrister to become the chair in subsequent years. As the hon. Member for North Southwark and Bermondsey mentioned, there are people who practise  law in their 20s and 30s and move out of the legal profession. They could well then work in consumer organisations.

Henry Bellingham: Proper jobs.

Bridget Prentice: Indeed—in other words, they do not become Members of Parliament.
Such people would have good experience from both sides, as it were, and in their 40s or 50s might be appropriate as chair of the board. For the sake of such people, we should be a little more flexible in respect of the subsequent years. We have made provisions so that there always has to be a lay majority. Even if he or she had been a practising lawyer, the chair certainly could not be one while they chaired the board. That is a reasonable safeguard to ensure that the board has a strong lay focus.
The second amendment would mean that the regulatory arm of the approved regulators would have to have a majority of lay members. I can see why that might maintain the confidence of consumers, but I do not agree that it should be a requirement as determined by the internal governance rules made under clause 30. We have based the Bill on the B-plus regulation model of Sir David Clementi. That fully recognises the principle of the self-regulation of the legal profession and the benefits of retaining the expertise that regulatory bodies have built up. That, of course, was subject to the very fact that they had to separate out their regulatory representative functions. It will also be subject to the supervision of a strong-oversight Legal Services Board.
The Bill provides for the system. We agree with Sir David Clementi that we should insist on a lay majority at the level of oversight regulator. That demonstrates independence from the legal profession at the very apex of the new framework. For that reason, we agree that the board cannot be, or be seen to be, operating in the pocket of the legal profession.
If the system is to be effective, there has to be the right level of expertise involved in the day-to-day regulation. In some cases—not all, but some—the regulatory arms of the approved regulator may need some professional members. For example, if a regulator was operating as a licensing authority, it is plausible that it would be necessary for professional members with experience of different professions to work alongside lawyers in ABS firms, and it would be for the regulators, through the internal governance rules made by the board, to determine what arrangements work best. To put a requirement in statute that there must be a lay majority might result in a one-size-fits-all regime that does not recognise the differences between each of the approved regulators.
 Clause 30 clearly states the key principles suggested by the Joint Committee, including the principle that the regulatory arm is adequately resourced and can make representations to the board if it considers that its independence or effectiveness have been compromised. The clause is drafted in such a way that there is flexibility for the board to determine the details of what arrangements would work best. It is perfectly feasible for the board to consider at a later stage whether there should be a lay majority on the regulatory arms. If it believes that that is required, it will use the internal governance rules.
 I have said throughout this debate that we are giving these powers to the board, and it is appropriate to leave it to the board to make its determination in future. I ask my hon. Friend the Member for North Durham to withdraw his amendment.

Kevan Jones: I am sorry that the Conservatives do not support these amendments because, having looked around the Room, I see that we might have had a majority for them. However, it is perhaps asking too much for the hon. Member for Huntingdon to give up vested interests, and to change the habits of a lifetime and the habits of this Committee.
I listened to the Minister carefully, but I am afraid that I do not have her trust in the legal profession. She followed up the suggestion that what I said was a what if with another what if: what if a 40-year-old who wanted to practise law then wanted to apply? We can play that both ways.
I welcome the Minister’s commitment to guarantee that for the first five years the chair will be a lay person. That is important because if the body is to have public respect and to regain some credibility after the hammering that it has had over the past few years, setting up a robust organisation is important and can be done only with an independent chair. I presume from what the Minister said that if the chair dies or resigns half way through the five-year term, the replacement will be a lay person, and I welcome that.
 It is difficult for the professions to argue that they will not fall back into their bad old habits of protecting their own interests, and if their regulatory arms are to be seen to be independent and champions of consumers’ interests, I still think that a majority of the representatives should be lay people. That is not to say that I criticise the Solicitors Regulation Authority, because the chair is doing a good job and taking a robust view, but that must continue and if there is to be long-term public confidence lay representatives should play a major part in those organisations.
With the assurance that the chair will be a lay person for five years, and the proviso that we may want to return to the matter on Report, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment proposed: No. 33, in schedule 1, page 122, line 17, leave out ‘and Lord Chief Justice’.—[Bridget Prentice.]

Question put, That the amendment be made:—

The Committee divided: Ayes 7, Noes 5.

Question accordingly agreed to.

Simon Hughes: On a point of order, Mr. Cook. I think that this time I may be able to suggest without a problem that amendments Nos. 34, 35 and 36 could be taken together, as they appear to come next in the list.

Frank Cook: Procedure means that such an approach is not permissible when Divisions are being sought. Much as I would like to oblige, that is not on.

Amendment proposed: No. 34, in schedule 1, page 123, line 6, leave out ‘with the concurrence of the Lord Chief Justice’.—[Bridget Prentice.]

Question put, That the amendment be made:—

The Committee divided: Ayes 7, Noes 5.

Question accordingly agreed to.

Amendment proposed: No. 35, in schedule 1, page 123, line 8, leave out ‘and Lord Chief Justice’.—[Bridget Prentice.]

Question put, That the amendment be made:—

The Committee divided: Ayes 7, Noes 5.

Question accordingly agreed to.

Amendment proposed: No. 36, in schedule 1, page 123, line 11, leave out ‘and Lord Chief Justice are’ and insert ‘is’.—[Bridget Prentice.]

Question put, That the amendment be made:—

The Committee divided: Ayes 7, Noes 5.

Question accordingly agreed to.

Amendment made: No. 37, in schedule 1, page 123, line 21, leave out sub-paragraph (5).—[Bridget Prentice.]

Amendment proposed: No. 38, in schedule 1, page 123, line 23, leave out ‘the Lord Chancellor and Lord Chief Justice remove’ and insert ‘removing’.—[Bridget Prentice.]

Question put, That the amendment be made:—

The Committee divided: Ayes 7, Noes 5.

Question accordingly agreed to.

Amendment proposed: No. 39, in schedule 1, page 123, line 26, leave out ‘and Lord Chief Justice’.—[Bridget Prentice.]

Question put, That the amendment be made:—

The Committee divided: Ayes 7, Noes 5.

Question accordingly agreed to.

Bridget Prentice: I beg to move amendment No. 40, in schedule 1, page 123, line 35, at end insert—
‘The terms of appointment of the chairman or any other ordinary member may provide for the Board to pay, or make payments towards the provision of, a pension, allowance or gratuity to or in respect of that person.
If the Lord Chancellor thinks there are circumstances that make it right for a person ceasing to hold office as chairman or another ordinary member to receive compensation, the Board may pay that person such compensation as the Lord Chancellor may determine.’.

Frank Cook: With this it will be convenient to discuss Government amendments Nos. 41 to 43.

Bridget Prentice: These amendments are not, I hope, contentious. They allow for the payment of pensions, allowances and gratuities to members of the board and the Office for Legal Complaints and bring the Bill into line with Government policy and Treasury guidance.
Amendments Nos. 40 and 42 are to ensure that ordinary members of the board and the OLC could receive a pension, allowance or gratuity, should that be necessary. They will also allow ordinary members to be paid compensation if appropriate. Amendments Nos. 41 and 43 allow for payment of compensation for loss of employment to staff at both organisations and give the Bill flexibility in respect of the terms and conditions available to the chairs and other ordinary members of the board and the OLC.

Henry Bellingham: I do not plan to make a speech on these Government amendments, I just want some clarification. When the Minister says that the amendments will bring the Bill into line with Government policy, is that a new policy? Has it cropped up since the Bill was published—indeed, since it was presented to the House of Lords—and, if not, was there an oversight on the part of her Department? I am slightly concerned, because there are public expenditure implications. Although Opposition Members are reasonably understanding, I should like some further clarification now, rather than waiting to speak at length on the matter later.

Bridget Prentice: The amendments follow advice in Treasury guidelines on how we should approach the matter. Generally, such positions are not pensionable, but the amendments give the flexibility, should it be necessary. The Government published the guidance relatively recently. It requires express provision to be made in statute if we want to allow for such a possibility. In addition to complying with the guidance, the key issue is flexibility. The measure allows us to have the flexibility so that the board can attract the best calibre of candidate. If necessary, it will compensate board members and staff when that is appropriate. On that basis, I commend the amendments to the Committee.

Jonathan Djanogly: The Government wish to make the amendment so that the terms of appointment of the chairman or other ordinary members of the board may provide for pensions, allowances or gratuities. It also allows the board to pay compensation to the chairman or other ordinary members in certain circumstances. At the moment, under paragraph 10, ordinary board members only receive pay and it is the chief executive or employees who are entitled to pensions and other benefits under paragraph 14.
 The Government also seek a similar amendment to be made to schedule 15 so that the terms of appointment of the chairman or other ordinary members of the OLC may provide for pensions, allowances or gratuities. It would also allow the OLC to pay compensation to the chairman or other ordinary members in certain circumstances.
 The Government’s proposal is certainly generous. However, they seem to be making a promise now, but working out how to fulfil it at a later date. Although the Government make these proposals on pensions, allowances and gratuities, they fail to explain how they will be paid for or to how much they might amount. Will the Minister please let us know in more detail how remuneration is likely to work in such bodies? How non-executive will the board members be? How will that tie in with their pay? Will it affect the Government’s regulatory impact assessment?
My hon. Friend the Member for North-West Norfolk spotted from the Minister’s comments that the measure would bring the Bill into line with the Government’s policy. He rightly asked what that policy was and from where it came. I do not think that the hon. Lady actually answered his question. If she would come back to the Committee with further details, we should be grateful.
Furthermore, the Government have suggested payment of compensation in certain circumstances, yet they have failed to explain in what circumstances it would be paid, what criteria would be used and who would determine whether such an award would be made. The Government seem keen that such matters should be sorted out by secondary legislation. They want us to accept their amendments now and discuss the content later. That seems a haphazard and superficial way in which to legislate. We would prefer to have solid proposals to discuss, not just the candy floss on the top with no substance to consider.
Clearly, the Government have not given the amendment the appropriate consideration that it deserves. For example, the terms of appointment of the Legal Services Board are set under paragraphs 4 to 9 of schedule 1. A member, other than the chief executive, must be appointed for a fixed period, which must not exceed five years. A person may only be reappointed once for a further period not exceeding five years. Therefore, the maximum amount of time that a person may remain on the board is 10 years. Only 10 years’ service, and the Government are to reward people with a pension. While the majority of people in the country work until the age of 65—not including Members of Parliament, of course—which means that it takes a period of more than 40 years to accrue a pension, members of the Legal Services Board can do so in one quarter of that time. Can the Government justify that?
Will the legal profession yet again be targeted as a source of payment for such ministerial largesse? The Exchequer contributes to the cost of the regulation of the financial services sector. Can the Minister confirm that it will do likewise in equal measure in respect of the regulation of legal services? She spoke about following the Government’s guidelines, but it is not the Government who will seemingly pay for such measures.
My noble Friend Lord Lyell stated in the other place in relation to setting-up costs that the
“importance of an independent and strong legal profession is a matter of very strong public interest. The Bill is intended to further that public interest. But it is heaping considerably more costs on the profession.”—[Official Report, House of Lords, 6 December 2006; Vol. 687, c. 1169.]
The same type of issues apply now, so if it is not the practitioners who will fund such pensions—they will, I think—will the Minister say who will pay?
The Government have again failed to appreciate the significance of the funding issues. As Lord Bach observed in the other place,
“On start-up costs...my experience of government leads me to the very firm view that costs are always understated at this stage. I fear that the start-up costs may be understated in this case, too.”—[Official Report, House of Lords, 6 December 2006; Vol. 687, c. 1178.]
I am not entirely sure whether those provisions will impact on the start-up costs, but I should be grateful to hear the Minister’s opinion.
The provisions will increase the financial commitment of bodies that provide legal services. Those costs, which may be significantly greater than their current running costs, will inevitably be passed on to the very consumers whom the Bill seeks to protect, hitting the very people whom the Minister says she prioritises. Moreover, to throw such a provision into the Bill at such a late stage shows how little the Government have thought the issue through. At the very least, she should tell us how much the proposals are likely to cost, and I should be grateful if she could send a paper giving details about what will be involved. 
Government amendments Nos. 41 and 43 are similar to the other amendments. Again, they represent a proposal for more spending with no thought about the consequential issues. Will the Minister please advise us how many employees the Legal Services Board and the OLC are likely to have? What will they do for their money? We seem to have heard little about that. How much would the proposed compensation amount to? What conditions would a complainant have to fulfil to be awarded such compensation? Would part-time staff qualify for the same compensation as full-time employees? How would the Government pay for it? Finally, why have the proposals been brought forward at this late stage?

Bridget Prentice: There was I thinking that they were relatively uncontentious amendments. How wrong could I be? As soon as money is mentioned, it always causes a bit of frisson.
As a general rule, non-executive board members do not receive pensions, but existing Government policy, which is set out in the Treasury’s guidance, says that we must make provision in legislation to ensure that there is an option to pay the pension. The provisions would bring the Bill into line with that guidance.

Jonathan Djanogly: Will the Minister give way?

Bridget Prentice: I can anticipate what the hon. Gentleman is going to ask me.
 The Treasury guidance says that if there is a possibility of non-departmental Government organisations providing pensions, it must be set out in statute.

Jonathan Djanogly: Is the Minister saying that even though the employees will not be civil servants, and even though they will be paid for by the legal profession and not by the Government, Government guidelines and rates will still dictate how much they are paid?

Bridget Prentice: It is because the board will be a non-departmental Government body that, in such instances, the issue of pensions must be placed in statute. There is Treasury guidance, which has been in existence for some time, and that is why the provision must be included in the Bill. There may be greater flexibility in appointing members to the board, but they will not in general receive pensions.
I am not sure that I can add a great deal to that point, except to say that compensation might be appropriate for several reasons, the most obvious being an early termination of appointment or a staff redundancy. On that basis, I commend the amendment.

Jonathan Djanogly: I am not entirely satisfied with the Minister’s response, and in all humility, I do not think that she is really on top of the issue, or that she understands what is involved. May I ask that she produce a report or letter that is circulated to everyone on the Committee, so that we can have a look? The matter will have to go back to the other place in any event, because it is a new amendment, but it would be better to consider it earlier rather than later.

Bridget Prentice: I am sorry that the hon. Gentleman does not think that I am on top of the issue. I have tried to explain it to him as simply as I possibly can, but clearly, I have failed to do so, so I shall try once more.
Generally speaking, non-executive board members do not receive pensions. However, Treasury guidance relating to the type of organisation that the Legal Services Board or the Office for Legal Complaints will be, states that if there is the possibility that a pension may be payable, it must be put in the Bill. It is as simple as that.
I did not answer the hon. Gentleman’s point about who will pay for the provision. It will be paid for through the levy on the approved regulator. Pension provision will form part of the ongoing cost of the regime and will be at a level determined by the LSB. If it will help, I am happy to write to the hon. Gentleman in more detail about the complexities of pension law, which would allow him to chew the matter over in a longer time frame, before the Bill returns to the other place.

Jonathan Djanogly: On the basis of the Minister’s kind offer we will not be opposing the measure.

Amendment agreed to.

Amendment made: No. 41, in schedule 1, page 124, line 6, at end insert—
‘The Board may pay compensation for loss of employment to or in respect of a member (or former member) of staff.’.—[Bridget Prentice.]

Question proposed, That this schedule, as amended, be the First schedule to the Bill.

Simon Hughes: I have four questions for the Minister about schedule 1. First, what are the Government estimates of the cost of the legal services board in each of its first three years; what is the best estimate of what it will cost the taxpayer or, if it is split, the contributors? Secondly, what is the best estimate that the Government can give us of the numbers of board members plus staff? How big an organisation will it be in terms of minimum and maximum numbers of people. Thirdly, we had a long discussion earlier about who will chair the board. I am not one of those people who is obsessed about this, but considering we have given up using sexist language, why is it used in the Bill, which refers to the chairman all the way through? I know that the parliamentary draftspeople no doubt work from the principle that male stands for male and female, but surely, in 2007, we should have moved on from that. I make a plea that we might be groundbreaking by having non-gender specific language. Fourthly, paragraph 27(2) of schedule 1, which is on page 126, states that in relation to
“Part 2 of Schedule 1 to the Northern Ireland Assembly Disqualification Act 1975”
the legal services board will be excluded. That means that someone cannot be on the board if they are a member of the Northern Ireland Assembly. So, if someone were appointed to the legal services board, they would have to stand down, as is the case with all the other offices of profit under the Crown. Given that this is an England and Wales Bill and not a Northern Ireland Bill, why does it not apply to Scotland, the Scottish Parliament and the Welsh Assembly? I do not understand why Northern Ireland has uniquely been referred to, given it is not a Northern Ireland Bill, yet Scotland has not been mentioned.

Bridget Prentice: I will write to all hon. Members about costs and I am sure that we will come back to that matter at a later stage of the Bill. I know that most hon. Members should have received a copy of my letter to the right hon. Member for Berwick-upon-Tweed (Mr. Beith) and others about our latest best estimate of the cost of transition and so on, but I will ensure that I provide a more recent update on that. I will do the same for the numbers of staff. I have every sympathy with the hon. Gentleman about the language being more non-gender specific and I find it quite difficult to talk constantly about the chairman of the board. If we can ever persuade parliamentary drafting counsel to enter the 21st century, we might get there on that matter.
I am sure that there is a specific reason why Northern Ireland is included whereas the other areas are not. I hope that somebody will give me the reason at some point, but I may have to stand here for some time before that happens. I am told that Scotland is not included because it is in the House of Commons Disqualification Act 1975 and thus does not have to be specifically mentioned, whereas the Northern Ireland Assembly is clearly not in that Act, so must be specifically mentioned. We all learn something new every day.

Simon Hughes: I understood everything except the Minister’s last explanation; I understood the words, but I did not understand what they meant. I am happy not to pursue this now, but if she could get someone to brief us on them, I would be grateful.
My point was that we must ensure that everyone across the United Kingdom is treated equally, and this provision appeared to be slightly anomalous.

Question put and agreed to.

Schedule 1, as amended, agreed to.

Clause 3

The Board’s duty to promote the regulatory objectives etc

Henry Bellingham: I beg to move amendment No. 206, in clause 3, page 2, line 25, leave out
‘so far as is reasonably practicable.’.

Frank Cook: With this it will be convenient to discuss amendment No. 244, in clause 28, page 14, line 9, leave out
‘, so far as is reasonably practicable,’.

Henry Bellingham: The amendments stand in my name and those of my hon. Friends the Members for Huntingdon and for Bournemouth, East. I do not know why they do not stand in the name of the birthday boy, but perhaps that can be put right at a later stage.
Amendment No. 206 refers to clause 3, which concerns the legal services board’s duty to promote the regulatory objectives set out in clause 1(1). Clause 3(2) states:
“The Board must, so far as is reasonably practicable, act in a way—
(a) which is compatible with the regulatory objectives, and
(b) which the Board considers most appropriate for the purpose of meeting those objectives.”
If one were to expunge the expression “so far as is reasonably practicable” from that provision, Her Majesty’s Government could get exactly what they want from the measures anyway. Surely the expression unnecessarily qualifies clause 1(1). What is the point of setting out the regulatory objectives in clause 1, if one does not require the board to respect them in clause 3(2)?
If that expression were to be left in that provision, the obligation for the board to act in accordance with the regulatory objectives would be removed in some circumstances. Surely, clause 3(2)(b) fulfils exactly what Her Majesty’s Government ought to want from the provision, thus not only is the expression “so far as is reasonably practicable” unnecessary, but it could, in some circumstances, undermine the objectives set out in clause 1. It represents a possible escape provision that could undermine the force of the objectives set out in clause 1.
Amendment No. 206 is a probing amendment, and I would like the Minister to comment on what I have said. I see that her civil servants are nodding, so I must have made a reasonably cogent point. I am sure that there is an explanation for the situation that I have outlined.
The amendment is grouped with amendment No. 244, which fast forwards us to part 4 of the Bill. We are some way off reaching that part, but amendment No. 244 refers to clause 28, which comes under the heading:
“General duties of approved regulators”.
So, we are moving on to a different part of the Bill. Clause 28(2) states that:
“The approved regulator must, so far as is reasonably practicable, act in a way—
 (a) which is compatible with the regulatory objectives, and
(b) which the approved regulator considers most appropriate for the purpose of meeting those objectives.”
Again, we see the expression
“so far as is reasonably practicable”.
I shall not rehearse the arguments in relation to clause 28, but they are similar to those that I have just made on clause 3. The evening is pushing on, and I know that it is important to make some more progress, and on that basis I commend the amendment to the Committee.

Simon Hughes: I have put my name and that of my hon. Friend the Member for Birmingham, Yardley to the main amendment, although not to the second amendment. In the Lords, there was a long and rather amusing debate about whether letters had gone astray, and what had happened to them. I read the Minister’s wonderful response, but I was not absolutely persuaded that it dealt with the point, so I thought it was worth bringing the matter back.
The concern is simply that we should not say, “Here are the objectives. You ought to follow them, but you do not have to if it is not practical.” We should have a structure that is firm and not qualified, and the amendment seeks to remove the qualification.

Bridget Prentice: If I may, I shall explain to the hon. Member for North-West Norfolk why the provision is worded as it is, although I have to say that I found his argument extremely persuasive, and what I really want to do is to go away and think about how the provision works. If I correctly understood him, he argues that we should take out the phrase
“so far as is reasonably practicable”.
and concentrate on whether clause 3(2)(b) encompasses what we want to achieve. If that represents a correct understanding of his argument, I have quite some sympathy for it.
The Government did not want to put an absolute requirement on the board and on the regulator to act in such a way as to be fully compatible with all the regulatory objectives all the time, because that could result in greater cost and bureaucracy, and probably in greater intervention by the board in the regulatory activities of the approved regulators—not least because there would then be a risk of judicial review if they did not so act.
The flexible and risk-based approach that Sir David Clementi advocated was the reason for drafting the clause as it is, such that the right way forward is to deal with matters on a case-by-case basis. The wording of clauses 3 and 28 therefore tries to recognise that the objectives might apply to a greater or lesser extent in the carrying out of functions, or even, sometimes, not at all.
I shall consider whether removal of the relevant phrase would undermine that flexibility in any way and whether we could rework clause 3(2)(b) to ensure that it would encompass the principles that we all agree should apply. On that basis, I ask the hon. Gentleman to withdraw his amendment.

Henry Bellingham: I am grateful for the Minister’s constructive and positive response and I look forward to her further comments on those points in Committee. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Jonathan Djanogly: I beg to move amendment No. 213, in clause 3, page 2, line 34, at end insert—
‘(4) In assessing what is proportionate in the regulation of approved regulators the Board shall have regard, inter alia, to—
(a) the regulator’s resources (including voluntary resources) and the effect on them of the Board’s acts;
(b) the effect on regulatory fees;
(c) the extent to which the Board’s acts might discourage entry to or retention in the regulated sector;
(d) the extent to which the number of persons regulated by a regulator might be reduced in consequence of the Board’s acts;
(e) the extent to which the regulator might be disadvantaged and another regulatory might derive an advantage, in particular through the movement between regulators of regulated persons as a consequence of the Board’s acts’.

Frank Cook: With this it will be convenient to discuss the following: Amendment No. 214, in clause 3, page 2, line 34, at end insert—
‘(4) The role of the Board is to ensure that the approved regulators act in a way which is compatible with the regulatory objectives.’.
Amendment No. 254, in clause 3, page 2, line 34, at end add—
‘(4) In considering what degree of protection may be appropriate for consumers, the Board must have regard to the differing degrees of experience and expertise that different consumers may have in relation to different kinds of regulated activity.’.
New clause 10—Board’s general duty to consult—
‘The Board must make and maintain effective arrangements for consulting representatives of practitioners and consumers on the extent to which its general policies and practices are consistent with its duty under section 3.’.
New clause 11—Consultation—
‘Arrangements under section (Board’s general duty to consult) must include consultation in advance of the Board setting its workplan for each year, so as to obtain the views of persons consulted on—
(a) the degree to which the Board’s proposed activities are appropriately targeted on areas giving rise to the greatest regulatory concern, and
(b) whether or not the proposed programme of works is proportionate, having regard to the need to avoid imposing unnecessary regulatory burdens.’.

Jonathan Djanogly: We come now to the quite serious issue of proportionality. The amendment was originally suggested to us by the Chartered Institute of Patent Agents and by the Institute of Trade Mark Attorneys. My hon. Friends and I propose that the amendment be added as new subsection (4) to clause 3. In different ways, both amendments deal with proportionality. Amendment No. 214 addresses the resources and impact on the regulator. Amendment No. 254 deals with the need to consider the different types of consumer. Clearly, the concern in both cases is to avoid a one-size-fits-all approach.
 Clause 3 deals with the board’s duty to promote regulatory objectives and will require the board to have regard to the principles of best regulatory practice. Specifically, it refers to the importance of regulatory activities being transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed. We endorse the statement in the White Paper:
“Today’s consumers are very different in the types of legal services they purchase, how often they engage with legal service providers and their level of knowledge of both the law and legal service providers. They need services delivered in ways that are flexible enough to suit their different needs.”
On one hand, high street practices may advise the inexperienced or the vulnerable who are unsophisticated in legal matters and, on the other hand, City solicitors represent a range of sophisticated corporate clients who often have their own in-house legal teams responsible for instructing external solicitors. Those consumers require a level of regulation that is proportionate to their needs and will not unnecessarily increase their legal costs or lead to unnecessary delays in transactions. Inappropriate regulation could cause them to look outside the UK jurisdiction for legal advice, in some cases, and damage the competitiveness of City firms and other firms throughout the country.
Proportionality is such an important issue that guidance should be given about what considerations the board should take into account. By not listing such considerations, we are making the Legal Services Board’s job far more difficult. We have told people what to do, now we need to advise them on how to do it. The amendment would give them such guidance.
There is a danger of the term “proportionate” being misinterpreted and being interpreted in a subjective rather than an objective light or there being an inconsistency in the way that board members assess proportionality. It is important that we safeguard against any such confusion. Therefore, we propose that guidance be given to the board about what matters they should consider when determining whether regulatory activities are proportionate. In that way, the Legal Services Board can carry out its job in line with how the Bill envisioned that it would.
We have had strong representations on the amendment, not surprisingly from the smaller end of the regulator’s market. The Chartered Institute of Patent Attorneys and the Institute of Trade Mark Attorneys, which I shall call the institutes, represent, train and examine more than 2,070 highly skilled professionals in the specialist field of intellectual property. As I mentioned on Second Reading, there have been few complaints against those professionals. The institutes support the amendment. In the House of Lords, Lord Kinsgland asked Baroness Ashton of Upholland repeatedly about this issue. She refused an amendment on the grounds that it would define proportionality in legislation, although she went on to promise to consider guidance on it. She then admitted that, as an independent body, the LSB would be under no obligation to have regard to any such guidance issued by the Secretary of State.
The institutes continue to believe that this is a vital issue. As two of the smallest approved regulators in the new system, they strongly believe that regulation must be proportionate. They aim to engage closely with the Legal Services Board to ensure that it fully takes into account the effect that regulation will have on the entry and retention of regulated persons to their sector and the effect on fees. However, they believe that the Bill should state more specifically that the board must act proportionately with regard to smaller regulators
Patent and trade mark attorneys are currently regulated with a light touch and the costs are low. They have concerns that the board may not sufficiently take into account the dangers of the over-regulation of the smaller regulators and their members. Currently, those members place only a very small burden on the regulatory system. They anticipate the risk that those who have the freedom to opt out will be over-regulated. That might restrict entry to, and discourage retention in, the professions and make the position of the approved regulator untenable.
The institutions are not what are known as closed professions. Firms that are members of the institutes need not be on the trade mark or patent registers to practice, unlike, for example, the situation that applies to solicitors or barristers. People could simply leave the institutes and practice unregulated, at no cost. Clearly, that would be against everyone’s interests, not least consumers’.
Amendment No. 213 focuses again on proportionality, which was a central theme of the Lords’ debates; indeed, it runs through the Bill. There is no doubt that all who have been involved in the passage of the Bill agree that regulation should be risk-based and proportionate. The Minister has emphasised that several times, but how do we ensure that the drafting of the Bill guarantees that the board acts proportionately? The fact remains that the board will be more or less free to make its own determination of what is proportionate, which could lead to disputes about the proper exercise of its functions regarding the professions.
The institutes recognise that proportionality depends in many ways on particular circumstances and that an all-embracing definition is perhaps too inflexible. However, they believe that the Bill would benefit from the inclusion of a non-exhaustive list of the key factors that the LSB should take into account when exercising its regulatory function. The also believe that that would benefit the future relationship between the LSB and the professions.
 The amendment would not define proportionality, but would set out the particular factors to which the board should have regard when assessing what is proportionate in the regulation of approved regulators. The institutes do not feel that it would be too prescriptive, or that it would restrict the flexibility of the board. Having given some thought to the matter, we are of the same opinion. The amendment was tabled because of the concerns of two of the smallest regulators. They fear that the LSB, which would get used to dealing with larger approved regulators, would overlook the limited resources of the smaller regulators, their low-risk status and their strong track record of good conduct. Further, there is a perceived risk that regulation would encourage practitioners to operate outside the regulated sector. That could have the knock-on effect of driving up costs for the remaining members, which could make CIPA’s and ITMA’s positions untenable.
In recent correspondence with the two institutes, Baroness Ashton stated that the Government were
“entirely in agreement that one size does not fit all”
and that a proportionate approach should be taken by the Legal Services Board. She also stated that
“the Legal Services Board will need to recognise the position of smaller regulators”,
such as ITMA and CIPA,
“when exercising functions under the Bill. In doing so, the Board will need to have regard to a number of factors which may include entry and retention of regulated persons to the sector and the effect on fees”.
The statement gave some reassurance that the Government and the institutes have the same intention, but it is notable that the Under-Secretary talked about what factors may be included when the board assesses proportionality. There is no obligation in the Bill that the board must have regard to such vital issues as entry and retention of regulated persons and its effect on the regulator’s fees, not to mention its resources.
Amendment No. 214 proposes that the
“role of the Board is to ensure that the approved regulators act in a way which is compatible with the regulatory objectives”.
It is important to state that the board’s role is supervisory rather than advisory. The Government have modelled the regulatory regime in the Bill on that of the Financial Services and Markets Act 2000, with the aim of providing a light-touch regime. That is what business wants, and the regime set up by the 2000 Act has in part ensured the success of the City in recent years. The LSB should respect the principle that primary responsibility for regulation rests with the professional bodies and accept that its role is merely to ensure that the approved regulators’ actions comply with the regulatory objectives. The amendment addresses concerns about whether regulation by the board will be light touch.
The Bill should provide for the relative roles of the Legal Services Board and approved regulators. The amendment reinforces clause 49, about which my hon. Friend the Member for North-West Norfolk will talk in due course. Clause 49, like the amendment, strikes the appropriate chord on light-touch regulation, the importance of which should not be underestimated.
Let us not forget that all the people that the Bill will regulate—firms of solicitors, barristers’ chambers, licensed conveyancers and patent attorneys—all now operate in a global marketplace. If those firms are not regulated by their approved regulators, such as the Law Society, and are seen to be directly regulated by the Legal Services Board, they are at risk of being thrown out of those foreign jurisdictions. If the Government are going to back-pedal now, surely they should assure all those practices with an international dimension that they will not be negatively affected? Have the Government sought legal advice on that, as well as on their liability for any financial losses that could result from such a move?
Following a lengthy debate in Committee, on Report in the other place, Lord Kingsland returned to his view that the Bill did not make it clear that the lead responsibility for regulation should lie with the professional bodies, with the legal services board exercising its powers only in the event of significant regulatory failure. Perhaps the Minister will show us that those concerns can now be allayed. My hon. Friend the Member for North-West Norfolk will address that point in some detail when we discuss part 4, but if the amendment were agreed to, that would be a good start.
Closely linked with the amendments are new clauses 11 and 12, which will be proposed by the Liberal Democrat Members. They concern the need for the board to consult on its general policies, which is consistent with clause 3, and on an annual work plan consultation. Generally speaking, the new clauses, which are covered in a slightly different way by our later amendments, make sense to me. I shall be interested to hear what the hon. Member for North Southwark and Bermondsey has to say on new clauses 10 and 11, and note that the amendments that are grouped with clause 8 will cover the consultation of practitioners in greater detail. We will also return to the issue when we debate new clause 3, as part of our discussion of clause 10.
However, considering the order of selection today, I should be interested to hear from the Minister whether the light-touch approach of new clause 10 would be any more appealing to the Government than new clauses 1, 4, 5 or 6.

Simon Hughes: I will be brief, but I want to say a few words about the new clauses that have been mentioned and to correct the hon. Member for Huntingdon: I think that he referred to new clauses 11 and 12, but new clauses 10 and 11 are under discussion.
The new clauses are almost self-explanatory. We are in a section on the general functions of the Legal Services Board and its duty to promote the regulatory objectives. It is always a question of degree and of how much ought to be put in the Bill, and so we propose:
“The Board must make and maintain effective arrangements for consulting representatives of practitioners and consumers on the extent to which its general policies and practices are consistent with its duty under section 3”,
and the other proposes that arrangements should include consultation in advance of setting the work, not least to obtain the views of the consultees of the targeting of specific interest in the board, and getting a view of what people think are the big issues on which the board should be concentrating and whether its work has some proportionality. That starts to open the question of the balance between the second-tier regulator and the board and the extent to which the board has a light or heavy touch.
I am not pretending that the drafting is perfect, but I should be interested to hear the Minister’s general response. The new clauses are an attempt to see how much we need to include the board’s duties, particularly its consultation duties, in the Bill.

Bridget Prentice: One of my aims in the debates on the Bill and in my discussions with stakeholders, whether they are from the legal professions, consumers or colleagues, is to ban the phrase “light touch”. This is not about light touch, but about proportionality. I want everyone, if I can persuade them, not to use the words “light touch” or any reference to touch, but the term “proportionate regulation”. I will then feel that I have achieved something.
We very much recognise that the smaller regulators in particular—ITMA and CIPA have been quoted extensively—might want statutory assurances about how they will be considered under the new framework. It is perfectly understandable that they might be concerned about that, but there can be no question but that an effective regulator must have regard to at least some of the considerations listed in amendment No. 213.
There is therefore nothing between us on the question of whether regulation should be proportionate. Clearly it should. Where we differ is on whether we consider it important to try to define it in the Bill. Indeed, in quoting CIPA and ITMA, the hon. Gentleman recognised that the board, the Office for Legal Complaints and the approved regulators must be able to take a proportionate approach on a case-by-case basis, which is the aspect on which we should concentrate our attention. I am concerned that trying to define what the board should take into consideration might cast doubt on whether other important factors also apply in a particular case.
In amendment No. 213, the hon. Gentleman highlights a number of different considerations that he regards as essential to the exercise of proportionate regulation. However, the key point is that there might be equally applicable and important factors that are not contained in the amendment. Setting out those considerations in the Bill could suggest that they had greater weight than other, non-statutory factors, which might be more important in relation to a particular regulatory decision.
To give the Committee an example, I am sure that hon. Members are all aware that the principle of proportionality is well established in legislation. Section 2(3) of the Legislative and Regulatory Reform Act 2006 establishes that
“regulatory activities should be carried out in a way which is transparent, accountable, proportionate and consistent”
and that they
“should be targeted only at cases in which action is needed.”
Those concepts are not defined in the 2006 Act, and we have simply replicated that model in the Bill.
It is of the utmost importance that the board, the regulators and the Office for Legal Complaints should be free to consider what is proportionate when making their regulatory decisions. It is equally important for the protection of the interests of the consumer, whether a multinational firm or the man or woman in the street, that proportionate regulation should be considered on a case-by-case basis. Placing definitions in legislation of what is proportionate in a particular case would serve only to restrict the scope of that principle.
Amendment No. 254 would ensure that the board could distinguish between those who are experienced consumers of legal services and those who are not, for the purposes of determining what level of regulatory control should apply. It might be considered as risk-based and proportionate to fix the arrangements in regulations, but fixing the arrangements in the Bill, so that they could be changed only by primary legislation, would mean losing that opportunity for flexibility that we have been carefully building throughout the Bill. I would argue that the board’s regulatory approach is to target those areas that need attention.
How a consumer copes in a given environment, based on their experience, is only one of the variables that we take into account in determining the level of protection. We have taken the view that the starting point should be blanket protection for all consumers, which can then be adapted to fluctuations in the legal services market and can respond to consumer needs on a case-by-case basis where appropriate.
I appreciate the sentiment behind amendment No. 214. We have consistently made it clear that we embrace the B-plus model of oversight regulation. Although I understand why the hon. Gentleman wants to make that explicit in the Bill, I am not convinced that that would achieve what he wants. In fact, it would lead only to more intrusive and burdensome regulation. I am sure that he, of all people, would not want us to go down that road. There would be a risk of judicial review if the board did not discharge its own duties to ensure that the approved regulators acted compatibly with all the regulatory obligations all the time.
It is important that the oversight regulator does not micro-manage and second-guess the actions of the approved regulators, as Members on both sides of the Committee will agree. I fear that the amendment would increase the scope for such micro-management by the board, by giving it a statutory duty to ensure that the approved regulators act in a particular way that is compatible with all the regulatory objectives all the time. The Bill already gives effect to the oversight model of regulation. When there are adverse impacts on the regulatory objectives, the board will have the right powers to take action. I do not see any reason or merit in going further than we have done.
I remind the Committee that the Government tabled amendment No. 6, which puts the board under a statutory duty to publish a policy statement setting out how it intends to have regard to the principle that its principal role is the oversight of approved regulators when formulating its policy statements. That provision, which also requires the board to take into account the desirability of resolving matters informally whenever possible, might provide the kind of principle that the hon. Gentleman seeks. Our position is that policy statements remain the best place to set out the relationship with the approved regulator; they can be adapted as necessary to ensure that the consumer is afforded the protection of proper regulation for the services that they pay for.
Turning to new clauses 10 and 11, we have discussed amendments to the board’s duty to consider the views of approved regulators, as well as of consumers. The Government have made clear their position on the issue. The Bill provides equal opportunities for representations by consumers and practitioners, through the approved regulators, to be considered by the board. That has been expressed differently in the Bill, according to the bodies involved, and for good reason. Unlike the legal profession, which already has in place well-established, well-organised and well-funded bodies that are more than capable of representing the views and interests of its members, consumers do not have such a voice—[Interruption.] I sound as if I am about to lose mine. We therefore thought it necessary to establish the consumer panel to represent consumers’ interests to the board.
 Approved regulators already have sufficient opportunities under the Bill to represent practitioners’ views. For example, in addition to the provisions requiring the board to consider representations, clause 3 specifically requires the board to have regard to key principles, including any other principle that appears to represent the best regulatory practice. In line with such practice—the Better Regulation Executive’s code of practice and consultation, for example—the board should consider representations, especially if they come from those affected by its functions. We do not need to set out any practice in the Bill which could, in effect, become outdated and irrelevant. It would narrow the focus of the board’s consultation too much if it were limited to the extent to which its general policies and practices were consistent with its duties under clause 3, or to the degree to which the board proposed activities and targeted them appropriately, whether or not the programme of work was proportionate.
Those principles apply, too, to any work plan, and it is unnecessary to put that duty in the Bill. The board has a duty under clause 3 to ensure that its activities are targeted and used only when appropriate and necessary. Given the duty for the board’s accounts to be laid before Parliament, there is sufficient financial accountability, so I urge the hon. Gentleman to withdraw his amendment.

Jonathan Djanogly: I thank the Minister for that thoughtful response to the amendments, and I shall go away and have a good read of what she said. My immediate thought is that proportionality is not simply a word that can be defined on the spot. It is an idea, and ideas are open to interpretation. If someone is given an idea about putting something together, they are given instructions on how to go about doing so. That is the sort of principle that we intended to follow. We are not dictating how the job should be done, but merely suggesting guidelines to be considered when performing it. If board members each use different criteria to judge proportionality, there could be a problem. Our intention is to ensure that a consistent approach is taken by each regulator. The Minister confirmed that she does not believe that the one-size-fits-all approach is appropriate, which is important. If she has thought about whether guidance could be a more appropriate way to define what is meant by proportionality in the context of legal services, I should be grateful for her views.
The Minister does not like the words “light touch”, but patent and trade mark attorneys, for example, like light-touch regulation. They believe that they have a light- touch regulatory existence at the moment, which allows them to compete effectively at an international level, so they have concerns about the proposal. The minimum regulatory cost to members is a registration fee for each register of about £70 a year. Costings suggest that the combination of a regulatory levy and operating costs as an approved regulator are likely to increase the annual regulatory cost to £750 to £1,000 a head, assuming that the number of registered attorneys remains at current levels, and those figures make no provision for set-up costs. For regulators, the concept of a light touch is a real one, as it will hit them in their pockets, so I hope that the Minister will consider that further and comment on whether guidance is appropriate.

Bridget Prentice: I will certainly consider issuing guidance, but I am conscious of the fact that if the Government started to do so we would get back into the argument about Government interference in regulation. I want to make it absolutely clear that the LSB is independent of the Government, and that it must be seen to be so. However, I will consider whether there is a way of using a code of practice or issuing guidance.

Jonathan Djanogly: On the basis of the Minister’s helpful answer and her offer to consider guidance, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3 ordered to stand part of the Bill.
Further consideration adjourned.—[Mr. Michael Foster.]

Adjourned accordingly at fourteen minutes past Seven o’clock till Thursday 14 June at Nine o’clock.